Tuesday, 14 August 2018

TUESDAY, 14 AUGUST 2018

TUESDAY, 14 AUGUST 2018

The Speaker took the Chair at 2 p.m.

Prayers.

Visitors

Papua New Guinea—Parliament, Delegation

SPEAKER: Members, I’m sure that you would wish to welcome two delegations present in the gallery. The first is Koni Iguan, the chair of the Public Accounts Committee, Lekwa Gure, chair of the Plans and Estimates Committee, and other delegates from the Parliament of Papua New Guinea.

United States—American Council of Young Political Leaders

SPEAKER: The other group is the American Council of Young Political Leaders exchange.

Oral Questions

Questions to Ministers

Employment Relations—Employment Law Changes and Union Access to Businesses

1. Hon SIMON BRIDGES (Leader of the Opposition) to the Prime Minister: Does she stand by all her Government’s statements and actions?

Rt Hon JACINDA ARDERN (Prime Minister): Yes.

Hon Simon Bridges: When she was asked whether proposed employment law changes would allow a union representative to enter the property of a business without the business’ permission, does she stand by her answer “only if the person in question they are visiting is a member of the union.”?

Rt Hon JACINDA ARDERN: I’m glad the member’s asked that question again; it gives me a chance to clarify. The example that he gave related to farmhouses, and I know that section 19 of the Act and the proposal that is included in this bill specifically precludes going into a dwelling, which means that the example that the member used would not have been accurate. So thank you for the opportunity to clarify.

Hon Simon Bridges: Can she confirm that the Government’s changes actually give the power to union representatives to enter the premises of a business without their permission, even if there are no union members on site, so that unions can recruit new members or distribute the union information?

Rt Hon JACINDA ARDERN: The first principle I want to point out is that this legislation that is before Parliament at present, essentially, brings back employment legislation that existed right up until 2015 in some cases, and I have to say that unless the member is now saying that there was a dire economic situation for the six years his Government was last in as a consequence of that legislation, then that’s for him to argue. We personally do not believe that this is the case with these changes. To come back to the question that the member raised, for the purposes of perhaps signing up directly a union member, which is quite a specific circumstance, then that would be the case. But, again, I point out that section 21 of the Act means that the union official has to comply with all reasonable health and safety and security procedures and must access the workplace in a reasonable way, having regard to normal business operations in the workplace. There are plenty of protections in place.

Hon Simon Bridges: Has she seen comments by the Minister for Workplace Relations and Safety in relation to her answers in the House last week: “If the National Party really wanted to debate the detail of the bill, they would be asking me questions, because it is my responsibility to understand the detail of this legislation. They should be talking to me, not trying to catch the Prime Minister off guard.”, and, if so, does she agree with her Minister that she was caught off guard?

Rt Hon JACINDA ARDERN: I know the point that the Minister was making was that if this was such a significant issue for the economy, why has the spokesperson not asked the Minister directly about this issue?

Hon Simon Bridges: Does she think it’s her responsibility to know the detail of a policy that business says is their number one concern with her Government?

Rt Hon JACINDA ARDERN: As much as it is the Opposition leader’s responsibility to know that a union official can’t enter a farmhouse.

Hon Simon Bridges: To be really clear: can the Prime Minister confirm that under the Government’s proposed employment law changes, a union representative will be able to enter the premises of a business without permission from that business?

Rt Hon JACINDA ARDERN: The person in question has to comply with the rules and obligations of that workplace, including the health and safety obligations. So if that means reporting in at the gate because there are health and safety obligations, then they must comply with that law.

Hon Simon Bridges: Why will union representatives not be required to gain consent from an employer before entering the premises of their workplace when even a police officer has to ask a judge for a warrant?

Rt Hon JACINDA ARDERN: As I pointed out in my last answer, if there are health and safety obligations that require them to do so, then they would. Again, I come back to this issue that these are changes that existed, in many cases in this omnibus bill, right up until 2015. These are changes that allow employees to have a voice, to be well represented in the workplace, and I’m surprised that the member considers that this is going to have such a dire impact on the economy.

Rt Hon Winston Peters: Using the member’s previous question, does a policeman in hot pursuit of a highly suspected murderer inside an office situation have to spend all the time to go and ask a judge for a warrant to pick that person up?

SPEAKER: Order! Order! I had called for order before, but I think we’ll just leave it there.

Hon Simon Bridges: Can the Minister confirm that we are giving unions the powers that we give police officers when they’re in hot pursuit of murderers?

Rt Hon JACINDA ARDERN: The point that the Deputy Prime Minister was making was that the member is being alarmist and dramatic.

Hon Simon Bridges: Can she confirm that under the Government’s proposed employment law changes, business owners will now have to pay workers for time spent undertaking union activities?

Rt Hon JACINDA ARDERN: Yes, in the same way that they have to, under the legislation, also allow them to have rest and meal breaks.

Hon Simon Bridges: So, to be clear, can she confirm that under the Government’s proposed employment law changes, businesses will now be responsible for funding union activities while workers should otherwise be doing their job?

Rt Hon JACINDA ARDERN: I would encourage the member to have a long conversation with the likes of Air New Zealand, where, through their framework of working collectively with their employees, they have improved the productivity, the health and safety, and they have a high-performance workplace. Unlike the member, I don’t believe that excluding employees is the way to become a productive company in a productive country.

Hon Simon Bridges: Will the law changes make private businesses responsible for undertaking and funding union membership drives?

Rt Hon JACINDA ARDERN: Again, as I say, this is legislation that existed under the last Government, and at that point—unless they’re starting to argue that under the first six years of their reign the economy tanked, they might want to change to a new line of questioning, because we on this side of the House believe it’s possible to empower employees to have a voice in the workplace and it won’t endanger business or the economy.

Economy—Business Confidence

2. Hon AMY ADAMS (National—Selwyn) to the Minister of Finance: Does he agree with the Treasury that “weaker confidence, in conjunction with other data, highlights the risk that growth over the coming fiscal year may be weaker than forecast in the Budget”, and the Reserve Bank that “with surveyed business confidence falling and continued softness in the housing market, GDP growth may not recover as expected”?

Hon GRANT ROBERTSON (Minister of Finance): I agree with Treasury and the Reserve Bank that there are risks to economic growth. I also agree with them that growth has held steady and that the fundamentals of the economy are sound. In particular, I agree with the Reserve Bank’s Governor’s comment that business investment should be increasing and economic growth is still very positive. Just today, that has been backed by Craig Hudson from Xero, who has said, “Xero’s Small Business Insights data challenges the notion that the economy is in a downturn.”

Hon Amy Adams: What does it say about the future of the economy that firms’ view of their own activity, which both he and the Reserve Bank have said is a measure that they look to, is now 23 points below its long-run average and 15 points below its average even under the past previous Labour Government?

Hon GRANT ROBERTSON: Most of the businesses who are making their reports of profits at the moment are reporting big increases in profits—just today, Freightways Group, we had Hallensteins last week, the ASB. What we know is that the economy has strong fundamentals, that we have a surplus, that we have debt tracking down. There is every reason to be optimistic about the economy.

Hon Amy Adams: When the Prime Minister said this morning that the Government will “focus more on bringing as much certainty around its agenda as I can.”, does he think that setting up 135 working groups, banning oil and gas without consultation, refusing to heed concerns about industrial relations reforms, and dismissing the views of business as both biased and junk are symbolic of a Government giving business certainty?

Hon GRANT ROBERTSON: I don’t agree with the premises in that member’s question, but what this Government did have to do on coming into office was clean up the mess of nine years of neglect across almost every portfolio area. We are bringing in a lot of people to help us with that agenda, they are enjoying that exercise, and we will improve on the mess that was left for us.

Hon Amy Adams: How will he adjust the Government’s programme to respond to concerns like those raised by the BNZ today—that New Zealand threatens to move into a pseudo-stagflationary environment with GDP growth likely to surprise on the downside, eating into revenue forecasts, while demands on expenditure will only increase?

Hon GRANT ROBERTSON: I’d encourage the member to read a little further down the page, where it says, “There remains plenty of momentum in the economy. The Government is providing substantial fiscal stimulus and monetary conditions are not only stimulatory but are easing further too.”—bottom of the page.

Hon Amy Adams: Well, does he share the sentiment of the Prime Minister that the reason business confidence is at a 10-year low and New Zealand has fallen from near the top to nearly the bottom of the OECD rankings is because businesses just don’t understand the Government’s policies; or is the truth that business understands perfectly well—they just don’t like this Government’s policies?

Hon GRANT ROBERTSON: I don’t believe that’s a fair characterisation of what the Prime Minister said. What we know historically is that business confidence surveys have been more pessimistic with Governments with Labour at the centre of them. But at the same time economic growth has been solid: 3.2 percent the last time, compared to 1.9 percent under the nine years of the National Government.

Economy—Reports

3. WILLOW-JEAN PRIME (Labour) to the Minister of Finance: What recent reports has he seen on the economy?

Hon GRANT ROBERTSON (Minister of Finance): On Thursday, the Reserve Bank released its May Monetary Policy Statement, which did show a downward trend in growth rates, which began at the beginning of 2017, and looks to have bottomed out in the March and June quarters of this year. The Reserve Bank indicated that the combination of the coalition Government’s stimulatory policies and a rise in net exports are expected to contribute to growth picking up again to above trend in 2019. And it forecasts growth on average of about 3 percent over the next three years.

Willow-Jean Prime: What reports has he seen on how these drivers of growth are different to previous periods?

Hon GRANT ROBERTSON: On Sunday, the Reserve Bank Governor noted how the drivers of growth over the next three years will be different to the past five years. He said, “… when you look at what are the drivers of economic activity now and towards the next two to three years, they are very different to the drivers of the last three to five years. The drivers were … recovery from the GFC, recovery from the Christchurch earthquake, very large population growth, and asset prices rising … Looking forward, it’s about driving growth. It’s about earning; it’s about the export-earning structures, the lower exchange rate, the … world growth; [and] good terms of trade. That’s about earning, producing product, and it’s about government investing and private sector investing.” It is exactly that transition to sustainable growth that this Government is focused on.

Willow-Jean Prime: What recent reports has he seen on economic activity?

Hon GRANT ROBERTSON: Many, and in light of previous admonishments, I will give just one, a report on the comments of Mainfreight managing director Don Braid, who told the New Zealand Herald that “I think the business environment is good right now.” He went on to say, “At least with the change of Government there’s a different attitude to getting on and doing things and we’d encourage the Government in … the initiatives they’re talking about—at least we’re not living in a question mark.”

Provincial Growth Fund—Tree-planting Programme and Benefit to Economy

4. Hon PAUL GOLDSMITH (National) to the Minister of Forestry: How many jobs, trees, or other returns does he expect to be produced or generated by the $485 million from the Provincial Growth Fund so far announced for forestry, and in what years will that money be spent?

Hon SHANE JONES (Minister of Forestry): The $480 million - odd dollars accessed from the Provincial Growth Fund will lead, in a forestry sense, to at least 2,000 jobs. The actual commercial returns are the subject of confidentiality between the parties that have transacted with the Crown. In so far as the other returns, we conceive it to be nigh on $3 billion. That figure is largely made up of the heavy lifting that our policy will deliver to meet the costs of climate change, something that was neglected. It was actually Graeme Hart who brought to John Key the proposal to outline a policy of this nature, and it was killed by Nick Smith.

Hon Gerry Brownlee: That is a lie.

SPEAKER: Order! Who said that?

Hon Gerry Brownlee: I did.

SPEAKER: Stand up, withdraw, and apologise.

Hon Gerry Brownlee: I withdraw and apologise. It was a misrepresentation.

SPEAKER: Order! The member will stand, withdraw, and apologise for the nature of the former one—and he’s on his last warning for the day.

Hon Gerry Brownlee: I withdraw and apologise.

Hon Paul Goldsmith: I raise a point of order, Mr Speaker. There were two parts to the question, and he didn’t answer the second part—in what years will that money be spent. But he didn’t answer half of the first part, either, where I asked how many trees. I didn’t get an answer on the trees.

SPEAKER: No, there was an “or”. There was an “or” in there, but the member will answer the second part of the question.

Hon SHANE JONES: The second part of the question relates to accountancy. As you know, when the Crown advances capital in the creation of an asset, there is a revenue column and an expense column. The commitments from the fund will be made; however, the cash will be transferred, as is the case with accrual accounting, over a longer period of time. But an expense incurred in relation to the provincial fund will have definitely been entered into the Crown books by the time 2020 comes around.

Hon Dr Nick Smith: I raise a point of order, Mr Speaker. I seek leave to make a personal explanation in respect of the accusation that was made in regard to Shane Jones in my role as Minister for Climate Change Issues.

SPEAKER: OK, I am going to put that, but I think the member should have either done it immediately or left it till the end of the question. But there were three people who interjected during that point of order. They might have been anticipating the leave, and that is some excuse, but the process is always that one waits until the leave has been sought. Is there any objection? There is objection. [Interruption] Order! Both of you.

Hon Paul Goldsmith: Isn’t 2,000 possible jobs for $485 million a lean return, and isn’t it more likely that $485 million left in the hands of New Zealanders to invest in their own business, or whatever they thought best, would produce more jobs?

Hon SHANE JONES: I can’t go past the gargantuan figure of $3 billion worth of economic upside for the New Zealand economy. Now, the jobs will, largely, be based in the provinces, and I think it’s very arrogant and presumptuous of the member to imagine that he can think better than the people who are lining up to develop the forestry industry, to develop the policies that will lead to a $3 billion positive outcome.

Hon Paul Goldsmith: Is he saying—and I think he used the figure of 60 million extra trees being planted as a result of this $485 million—that those 60 million trees will save the country $3 billion in climate change obligations?

Hon SHANE JONES: The reference to the $3 billion figure—approaching $3 billion—reflects the full gamut of policies that the billion tree strategy represents: refinements to the Overseas Investment Office, refinements to the emissions trading scheme, grants, and an array of joint venture programmes. The 60 million figure that the member refers to is a paltry amount of what we will achieve over the 10-year period. Whilst it’s important, it does not represent the entirety of the Government’s commitment.

Hon Paul Goldsmith: I’m not sure I follow that. Will the money being handed out be contingent on hiring New Zealanders to plant the trees?

Hon SHANE JONES: There’s an insinuation that somehow I, as the Minister, am handing out the money. In politics, envy is a disease, and there’s far too much of it emanating from the other side of the House. At one level, they seek to waste me, at another level they seek to emulate me, but imitation is the worst type of flattery. I am not handing out the money. There is a robust process where partnership funding will be made available, and a part of that will actually relate to forests within the member’s own environment. So any suggestion that I’m handing out the money personally is unworthy of the time of question time.

SPEAKER: Have another go—go on.

Hon Paul Goldsmith: Do you want me to rephrase that question?

SPEAKER: No, just have an extra supplementary.

Hon Paul Goldsmith: That’s very kind of you, Mr Speaker. Was the Ngati Hine Forestry Trust’s May 2018 newsletter correct when it said that the Crown had committed to plant a forest on their land in around 25 years’ time, after an earlier forest had been planted, grown, and harvested; if so, is he planning to pay, in the next 10 years, for work that will be carried out in the 2040s?

Hon SHANE JONES: A word of clarification: did the member refer to 2040?

SPEAKER: I think he did.

Hon SHANE JONES: Obviously a time when he will be back as a Minister. Now, I think I need to repeat myself on the question of the Ngāti Hine transaction: it is a matter of confidentiality. It is an orthodox transaction between the Crown and the hapū of Ngāpuhi. They have developed a key resource, they are developing the people, and I want the Ngāti Hine hapū leadership to focus more on growing trees than undermining Andrew Little’s settlement ambitions for Ngāpuhi.

Hon Paul Goldsmith: How do we know it’s an ordinary commercial transaction when he refuses to release any detail about the transaction; and is he surprised that confidence in this Government is falling to such low levels when we’re seeing a Government that’s prepared to spend half a billion dollars, with such a loose idea of what it’s getting for the money?

Hon SHANE JONES: Mr Speaker, was that the additional supplementary?

SPEAKER: I think the member should answer it. I think the last time I clarified a matter for the member, he was naughty.

Hon SHANE JONES: The policies pertaining to yesterday’s announcement—the amounts that were announced in the Budget—are wide open for all members of the public to see. It is not reasonable when the Crown enters into a transaction with a private party to create a commercial venture—we are not going to violate the covenants of that transaction. That is not unusual. It’s something that happened at considerable frequency under the last regime, and, as a member seeking to create a reputation of being a regional development expert, he should know better with these paltry, trivial questions.

Rt Hon Winston Peters: Supplementary question.

SPEAKER: No, before the member does, I think we’ve had enough of the characterisation of the quality of the questions. I’m just going to advise the Minister to focus on answering the question rather than playing the man.

Rt Hon Winston Peters: Can I ask the Minister: is the Ngāti Hine forestry venture and trust, which was launched near Ngāwhā some time ago, the one that he and I attended, or is there a trust called “Nattay Hinnay” that we are not aware of?

Hon Gerry Brownlee: He’s got no responsibility for that.

SPEAKER: Well, I actually think he does—the first part of the question, at least.

Hon SHANE JONES: The transaction that the member is referring to is the announcement that the right honourable member and I attended to. I would say that other Ngāti Hine forest transactions already exist between the Crown, and they were subject to decision making under the last regime. There is nothing unusual and there is nothing strange about the Crown transacting with Ngāti Hine, a hapū of the Ngāpuhi tribe.

Hon Paul Goldsmith: Well, how can we know there is nothing unusual when we know from a newsletter from the trust that the Crown is going to pay all the costs, and on a much more favourable basis than they would have received from the private sector, and that they’re not only going to pay for one lot of forests to be planted and chopped down and harvested; they’re also going to pay for another forest to be built and handed over 100 percent to Ngāti Hine? How do we know that that is a normal, ordinary transaction and we’re getting good value for money out of taxpayers’ funds?

Hon SHANE JONES: I think that’s a reasonable question, and I don’t mind assisting the member gain tuition from the forestry industry. There is no shortage of examples in the forest sector where parties transacting to grow forests absorb an obligation to replant the forest. Not only is that very important in this case; it’s importance will grow as climate change obligations increase. Any suggestion that this model is somehow off the provincial fund reservation is, I think, unfair.

Education—Industrial Action in Primary Schools

5. Hon NIKKI KAYE (National—Auckland Central) to the Minister of Education: How many primary schools have notified the Ministry of Education that they will be open for instruction or supervision, or will close tomorrow?

Hon CHRIS HIPKINS (Minister of Education): I’ve been advised that as of this morning, 1,264 schools, including intermediates and contributing schools, have notified the Ministry of Education that they’ll be closed tomorrow. The ministry’s continuing to monitor that. Schools have been asked to give parents and caregivers as much notice as possible as to whether the school will be open for instruction or supervision, or will close. The New Zealand School Trustees Association is working with school boards to help them prepare and plan for strike action, and advice was sent out two weeks ago to school boards providing guidance on potential strike action and how to communicate about that to parents.

Hon Nikki Kaye: In light of the fact that he does not have a firm number of exactly how many schools will close, can he confirm that there have been complaints to the ministry and his office about the adequacy of communication to boards of trustees about their responsibilities regarding the strike tomorrow?

Hon CHRIS HIPKINS: I reject the first part of the question. I gave her a specific number—it’s 1,264.

Hon Nikki Kaye: So can he confirm that he has received an answer from every school in New Zealand as to whether they are closing or remaining open?

Hon CHRIS HIPKINS: That wasn’t the question. The question was “How many schools have notified the Ministry of Education?”, and 1,264 have.

Hon Nikki Kaye: Why has the Government not offered additional support to parents who may be struggling where schools may be closed, and they do not have access to adequate supervision arrangements for their children?

Hon CHRIS HIPKINS: What school boards do in response to the strike is a matter for school boards of trustees.

Hon Nikki Kaye: In light of the fact that he does not have an answer from every school in New Zealand as to what is happening tomorrow, if children are left unsupervised due to late decisions by schools, bad communication on the part of the ministry, will he take any responsibility for his hands-off approach to the strike tomorrow?

Hon CHRIS HIPKINS: I absolutely reject the entire premise of the member’s question. Advice was sent to school boards of trustees two weeks ago.

Jan Tinetti: What steps is the Government taking to address the concerns raised by the primary school teachers?

Hon CHRIS HIPKINS: We are listening very carefully to the concerns primary school teachers have raised throughout these negotiations. We’ve already taken steps to reduce teacher workload by abolishing national standards. We are taking steps to restore teachers’ democratic representation on their governing body. We have introduced an emergency supply package for teachers prior to Christmas and expanded it in this year’s Budget. And we are working constructively with unions to deal with pay equity issues for the lowest paid in our school system, because we know that we’ve got a lot of work to do in that area.

Mana in Mahi - Strength in Work—Programme Launch

6. PRIYANCA RADHAKRISHNAN (Labour) to the Minister for Social Development: What response to recent employment-related announcements has the Ministry of Social Development received from businesses and industry?

Hon CARMEL SEPULONI (Minister for Social Development): Last week the Prime Minister, Minister Jackson, and I launched the Mana in Mahi - Strength in Work programme. Mana in Mahi will give thousands of young people the opportunity to learn and gain qualifications while in meaningful employment. Since the announcement, we have had considerable positive feedback. Ten new businesses have registered their interest with the Ministry of Social Development (MSD), from a variety of industries, and MSD is engaged in a programme of work to further grow and develop industry partnerships in order to provide an array of apprenticeship opportunities for our young people.

Priyanca Radhakrishnan: Why is the Mana in Mahi programme important?

Hon CARMEL SEPULONI: Mana in Mahi will support the participation of, and improve the employment outcomes for, all young people including Māori, Pacific, and disabled young people. MSD has already had interest from young people via their dedicated MSD industry partnerships in-box and received calls and emails from work brokers saying they have clients interested in the initiative. Mana in Mahi will also help address skills shortages in sectors that provide sustainable employment opportunities. Already, businesses from sectors with skills shortages such as building and construction, tourism, hospitality, and agriculture have contacted MSD to see how they can be involved.

Priyanca Radhakrishnan: What types of apprenticeships under Mana in Mahi will be available in the construction industry?

Hon CARMEL SEPULONI: This Government is committed to increasing our construction workforce. That’s why I’m pleased that the Downer Group and their subcontractors have already committed to participating in this programme. Downer have already achieved great results in their work with MSD, with over 1,000 MSD clients being placed with Downer and 70 to 75 percent of clients still in employment after 12 months. In the Mana in Mahi programme, Downer will coordinate and run training courses for their subcontractors not only providing innovative opportunities for the apprentices involved but also providing excellent support for smaller businesses.

SPEAKER: I must say that was a very long answer, and I’m not sure that it answered the question, but anyway.

Police—Deputy Commissioner of Police, Inquiry into the Appointment Process

7. Hon PAULA BENNETT (Deputy Leader—National) to the Prime Minister: Does her Government expect high standards from all Government departments and Ministers?

Rt Hon JACINDA ARDERN (Prime Minister): Yes.

Hon Paula Bennett: Will the terms of reference for the inquiry into the appointment process for the Deputy Commissioner of Police include consideration on whether or not the appointee is a suitable candidate, or is it still the case, as per the Cabinet paper, that his suitability will not be considered?

Rt Hon JACINDA ARDERN: As I have outlined in the past when I’ve been asked such questions, this inquiry will look at whether or not all relevant information was properly provided to or gathered by the State Services Commission during the appointment process. That would, of course, include appropriate reference checks and information you would usually expect to be included in those reference checks. At the conclusion of that inquiry, if it’s found that we were not properly furnished with all of the information that we should’ve been, then it would be up to, potentially, the State Services Commission or Solicitor-General to look into the suitability of the candidate in the aftermath of that first inquiry.

Hon Paula Bennett: Does she have confidence in Deputy Police Commissioner Wally Haumaha?

Rt Hon JACINDA ARDERN: As I have previously outlined, we’re undertaking this inquiry to ensure that we go through a proper process, that we were furnished with all the information we should’ve been to make a judgment as to the suitability of the candidate. If we find that that information was not properly passed on, then I’ll look at whether or not it needs to go to the Solicitor-General or the State Services Commissioner.

Hon Paula Bennett: So does she believe that he should stand down, at the very least, temporarily, while this inquiry takes place, since she either cannot or will not currently express confidence in him?

Rt Hon JACINDA ARDERN: If the member is referring to the issues around bullying in the workplace, that is a matter for the police to look into. I have seen that they’ve made this statement—the Commissioner of Police—that they will be investigating those complaints and are currently seeking further information around what has occurred then, and it is perfectly proper that they do so.

SPEAKER: Order! I am going to ask the Prime Minister to have another go at answering the question that was asked. Repeat the question.

Hon Paula Bennett: Certainly. Does she believe that he should stand down, at the very least, temporarily, while this inquiry takes place, since she either cannot or will not currently express confidence in him?

Rt Hon JACINDA ARDERN: I consider that an employment matter for the police, and my understanding is that they have given assurances that they are investigating that issue, and if they believe that’s the appropriate step, that would be for the commissioner to take that step.

Hon Paula Bennett: Is it appropriate to leave someone in the very senior and very powerful role of Deputy Police Commissioner when the Prime Minister herself cannot express confidence in him at this time?

Rt Hon JACINDA ARDERN: This is an incredibly serious matter. It is an employment matter. We are making sure we’re going through a proper process that includes the ability for someone to investigate whether or not we were furnished with the information we required to make the appointment in the first place. If there are allegations of bullying in the workplace, that is for the employer to look into, and it’s perfectly proper that they do so.

Hon Paula Bennett: Is she concerned that after 11 years of police working incredibly hard to change their attitude and their culture towards victims, particularly of sexual assault and intimidation, that the current fiasco could mean distrust in police rises and victims don’t feel like they can come forward?

Rt Hon JACINDA ARDERN: I absolutely reject that assertion. In fact, the very reason that we are undertaking this inquiry is so that those groups can have faith that we have heard the concerns and that we are undertaking a proper process.

Parliament—Support for Reduction in Number of Seats

8. DAVID SEYMOUR (Leader—ACT) to the Prime Minister: Is she aware of any Ministers in her Cabinet that support reducing the number of members of Parliament and removing the Māori seats; if so, who are those Ministers?

Rt Hon JACINDA ARDERN (Prime Minister): Not in their capacity as Minister.

David Seymour: Is she concerned that New Zealand First might vote for my smaller Government bill, given that they have supported the same concept in the past?

Rt Hon JACINDA ARDERN: No.

David Seymour: Is that because Winston Peters is a lion on the hustings and a lamb in Cabinet?

SPEAKER: Order! It’s getting very close to being ruled out, but we’ll just leave it now. [Interruption] No, I’m saying to the Prime Minister: it is an inappropriate question and I’ve ruled it out.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. It’s worse than that, sir. It’s worse than that. He’s called into question my undoubted courage, and I do not need a member of the “Oblivion Party” to be doing that.

SPEAKER: Well, I think that that gets to about sort of one inappropriate comment each, and, frankly, I will just say to the Deputy Prime Minister, he’s been 1-all, I think, on three occasions today, which might indicate that he needs to take a bit of care.

Police—Deputy Commissioner of Police, Inquiry into the Appointment Process

9. CHRIS BISHOP (National—Hutt South) to the Minister of Internal Affairs: Does she stand by all of her statements and actions in relation to the Government inquiry into the appointment process for a Deputy Police Commissioner?

Hon TRACEY MARTIN (Minister of Internal Affairs): Yes, in the context they were given, except for one of my supplementary question answers from 8 August, which I subsequently corrected later that day.

Chris Bishop: Is she concerned about the integrity of the inquiry in light of allegations revealed this morning that Mr Haumaha contacted a witness to his alleged bullying—contact which is now being investigated by the police in a bid to shore up support after the New Zealand Herald started making inquiries about the alleged bullying incident?

Hon TRACEY MARTIN: No, because the inquiry I have been tasked by Cabinet to set up is into the processes of the State Services Commission and the information that was provided to the Minister and Cabinet in the original appointment.

Chris Bishop: Will the inquiry, now led by Mary Scholtens QC, allow members of the police force to give evidence to the inquiry anonymously, with their identities and jobs kept confidential?

Hon TRACEY MARTIN: My understanding is that that will be a decision for the chair of the inquiry. There are terms of reference, and what she needs and who she needs to speak to inside those terms of reference are fully at her discretion.

Chris Bishop: Would she be concerned if senior members of the police force felt afraid of giving evidence to the inquiry for fear of their names and jobs being revealed and any possible consequences after the inquiry reports back; if so, what will she do about those concerns?

Hon TRACEY MARTIN: I’m not sure I have any ministerial responsibility around that. My responsibility is to provide the administration for the chair of the inquiry, and inside the terms of reference, which are reasonably broad, then the chair can actually speak to whomever she wishes. She could make that anonymous if she wishes. I don’t have any control over that.

Electoral (Integrity) Amendment Bill—Statements

10. Hon Dr NICK SMITH (National—Nelson) to the Minister of Justice: Does he, in respect of his Electoral (Integrity) Amendment Bill, agree with the analysis by the Inter-Parliamentary Union in the report “The impact of political party control over the exercise of the parliamentary mandate” that describes the power of political parties to revoke the parliamentary mandate as “political party dictatorships” and which concludes “the parliamentary free mandate remains a cornerstone of democracy”?

Hon ANDREW LITTLE (Minister of Justice): That Inter-Parliamentary Union (IPU) report was not in respect of the Electoral (Integrity) Amendment Bill, notwithstanding the very fine sentiment that it expressed. But, in light of the sentiment that it expresses, I certainly will be voting against Supplementary Order Papers 60 and 65 from members on that side of the House, which try to amend the Electoral (Integrity) Amendment Bill by requiring general secretaries of parties and governing boards of parties to make decisions that are properly the preserve of members of this House.

Hon Dr Nick Smith: Does he apply the statement he made of New Zealand’s 21 constitutional experts opposing his bill, and I quote him, “They are all wrong. They just don’t understand.” to the IPU, when this organisation represents 164 parliaments and has for over 130 years advised on these constitutional issues and is the most respected international institution on best practice for parliaments?

Hon ANDREW LITTLE: I think that question is asking whether or not the principle that that member outlined from the IPU report about political party dictatorship applies to the Electoral (Integrity) Amendment Bill, and I do not accept that that principle as adumbrated in that report applies to the Electoral (Integrity) Amendment Bill.

Hon Dr Nick Smith: Can he confirm the analysis in that IPU report that his bill’s provisions allowing a party leader to dismiss an MP with the only check being a two-thirds vote of their caucus matches most closely the provisions in the Republic of Zimbabwe, and is that country now the model democracy for his Government in what New Zealand should follow?

Hon ANDREW LITTLE: No, because that member’s summary of the electoral integrity bill that is contained in that question is just completely wrong. There are more safeguards than just a two-thirds vote of a party caucus.

Rt Hon Winston Peters: Can I ask the Minister: does he have regard to all manner of views and behaviours on this issue, including the Hon Nick Smith leading the charge on a whipped 100 percent vote to expel fellow National Party MP Williamson?

SPEAKER: Order!

Hon Gerry Brownlee: He’s got no responsibility for that; it didn’t happen.

SPEAKER: I’m not looking to a matter of fact; I am looking to a matter of responsibility, and I think it is a stretch.

Hon Dr Nick Smith: Why is his Government ignoring the advice of the IPU in respect of New Zealand’s electoral law but at the same time funding the IPU to advise parliamentary democracies in developing countries on best practice; or is this Government’s stance: “Do as we say, not as we do.”?

Hon ANDREW LITTLE: The IPU has not given advice on this country’s electoral laws.

Family/Whānau Violence—Safety of Children

11. Hon ALFRED NGARO (National) to the Minister for Children: Does she stand by all her statements, including her statement that children need to be “safe, loved, healthy, and educated if they are going to live well”?

Hon TRACEY MARTIN (Minister for Children): Yes, in the context in which they were given, and I particularly stand by the statement that, absolutely, children need to be safe, loved, healthy, and educated to live well.

Hon Alfred Ngaro: How, then, does the Minister reconcile that statement—“feel safe and loved”—with the teenage boy who was kicked in his head by his father, when his lawyer, Chris Nicholls, told media last week that he hadn’t heard back from Oranga Tamariki since making a complaint in February of this year?

Hon TRACEY MARTIN: I would ask the member to send that back directly to my offices so that I can follow up in much more detail.

Hon Alfred Ngaro: How do pre-schoolers feel safe and loved in a case of suspected family violence, where they have had to wait at least six months for a family group conference?

Hon TRACEY MARTIN: Again, these are very operational questions about—with 6,250 children in care, with 89,000 calls of concern in New Zealand to Oranga Tamariki. I would ask the member, if he has concerns, to please contact my office directly so that we can take immediate action.

Hon Alfred Ngaro: So how does the Minister reconcile those comments with that of the Wellington regional manager for Oranga Tamariki, Grant Bennett, who said, “all cases of abuse were considered immediately”?

Hon TRACEY MARTIN: If that is what Mr Bennett has said, then Mr Bennett needs to stand by his words. If the member has serious concerns in this way, please, I encourage him to contact my office directly the moment he hears of them, not to wait to bring it to this House.

Health Services—Mental Health and Intellectual Disability Services Funding

12. ANGIE WARREN-CLARK (Labour) to the Minister of Health: What recent announcement has he made regarding care and support for New Zealand’s most high-needs intellectual disability and mental health patients?

Hon Dr DAVID CLARK (Minister of Health): On Thursday, I accompanied the Prime Minister to the Rātonga-Rua-O-Porirua Mental Health Campus to announce $8.4 million funding. The funding is for a new six-unit secure facility that will provide quality individualised care for some of our most vulnerable citizens. These individuals and the staff that care for them deserve fit-for-purpose facilities. The needs of these individuals were not being met in the way that we intend to meet them into the future. This announcement puts right a situation that should have been put right previously.

Angie Warren-Clark: How will the new facilities help improve care and treatment for those high-needs individuals?

Hon Dr DAVID CLARK: Currently, there are no specialised accommodation facilities for these individuals, who have previously been kept in in-patient services for significant periods of time. These new individualised service units will provide greater quality of life and will allow more opportunity for rehabilitative gains and potential for reintegration, in some cases, into the community. This is great news for the small group of high-needs New Zealanders and their families.

Angie Warren-Clark: How does this announcement complement other Government initiatives in mental health?

Hon Dr DAVID CLARK: This announcement targets the needs of some of the most vulnerable New Zealanders. At the same time, the Government is extending school-based health services to an extra 24,000 students in decile 4 schools. We are putting dedicated mental health support in primary and intermediate schools in Kaikōura and Canterbury through the Mana Ake programme. We’re supporting young people with mild to moderate mental health needs by launching the integrated therapies pilot for 18- to 25-year-olds, and we’ve funded new drug and detox facilities at Auckland City Mission. And, of course, at the end of October, the inquiry into mental health and addictions will report back to me in just a few short months what I expect will be robust and far-reaching recommendations.

Bills

Imprest Supply (Second for 2018/19) Bill

First Reading

Hon GRANT ROBERTSON (Minister of Finance): I move, That the Imprest Supply (Second for 2018/19) Bill be now read a first time.

A party vote was called for on the question, That the Imprest Supply (Second for 2018/19) Bill be now read a first time.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 57

New Zealand National 56; ACT New Zealand 1.

Bill read a first time.

Bills

Appropriation (2018/19 Estimates) Bill

Third Reading

Bills

Imprest Supply (Second for 2018/19) Bill

Second Reading

Hon GRANT ROBERTSON (Minister of Finance): I move, That the Appropriation (2018/19 Estimates) Bill be now read a third time and the Imprest Supply (Second for 2018/19) Bill be now read a second time.

It is my great honour and privilege to be able to present this third reading of the Government’s first Budget to the House. I want to thank all of the select committees who worked through the Estimates, particularly the chairs of the select committees and all those who spoke in the debate. It is an important part of our democratic process that the Parliament gets to assess the plans of the Government, put those under the spotlight, and then come back to this House and debate them, and I am very grateful for the work of the select committees.

This Government has brought to the House a Budget that provides the balance that New Zealand needs to continue a record of strong economic management and make the investments that we need to fix the long-term problems that are facing New Zealand. Budget 2018 is about building the foundations for the future; the foundations for a future economy that delivers productivity, sustainability, and inclusion for New Zealand; that leaves behind once and for all the belief that we can have a casino economy where we gamble on whether or not house prices will go up, where we leave ourselves exposed to commodity markets and we rely on population growth to fuel our economy. As the Governor of the Reserve Bank said at the weekend, the next three to five years are about making that transition, and this Budget is the Budget that lays the foundations for that.

In particular, Mr Speaker, I want to reference three key areas that this—Madam Deputy Speaker. You changed while I was looking down—and for the better, I might add. There are three key areas that are going to lead to a more productive economy within this Budget. The first of those is a $1 billion boost to research and development funding. I want to thank Minister Megan Woods for the work that she has been doing since the Budget was tabled—going around the country and working with New Zealand businesses on the detailed design of our research and development tax incentive. This will finally give the businesses of New Zealand certainty about their ability to invest in innovations and research and development that will drive productivity. It was an important step forward.

I also want to note the major investments being made in this Budget in the provinces and regions of New Zealand. The $1 billion Provincial Growth Fund will make the biggest difference to New Zealand’s regions of any single investment made in the lifetime of any member in this House. I’d encourage Mr Goldsmith to get out of Epsom and take a look around the country. He’ll actually see that in the regions of New Zealand they are excited that they have a Government that backs them and is actually going to get in there and help build sustainable economic development and jobs in our regions. From the Far North to the far south of New Zealand, people are responding to the Provincial Growth Fund as a way of building up our economic development.

The Green Investment Fund, which the Hon James Shaw has been driving, will start to leverage private sector investment in that transition to a low carbon economy. This side of the House is not prepared to sit on the sidelines and say it is other people’s responsibility for New Zealand to start to live up to the obligations we have when it comes to climate change. And it’s not just about those obligations; it’s actually New Zealand’s brand proposition. This Budget is about making sure that we actually start to live up to our clean and green reputation and use that to help drive economic opportunities, and the Green Investment Fund is an important part of that.

The other element of that is the infrastructure challenge. This Budget puts in place $10 billion more investment in infrastructure over the next five years than the previous Government had planned—$10 billion extra going into making sure that we actually unclog the roads of Auckland; that the $1 billion a year being lost in productivity because of congestion in Auckland comes back into the economy and delivers jobs. We’ll do that by investing in rail, by investing in roads, by actually getting coastal shipping going again, and by having a transport strategy that’s actually for the middle part of the 21st century, not looking in the rear view mirror, as some would do. So R & D, skills, infrastructure, and investment in the Green Investment Fund—all of these things are vitally important to supporting businesses to grow.

On the other side of the ledger, what this Budget does is begin to rebuild the critical public services undermined so much over the last nine years. An extra $3.2 billion is going into health services. I want to add to that: $750 million this year is going into capital in our health sector. When we look to what happened in the previous Budget from the previous Government, the equivalent figure was $150 million. This Government is saying $750 million. The reality of a $150 million commitment from the previous Government is mould in the walls and people not being able to use operating theatres unless they’re wearing hazmat suits. That’s the health sector that this Government inherited and we are turning it around. It will take time, but we have committed to a long-term investment to make sure that happens. We’re reducing GP fees by $20 to $30 a week for 540,000 New Zealanders on low incomes, and all under-14-year-olds will be getting free GP visits.

We’ve started sorting out things for the midwives, and since this Budget was put in place, I want to acknowledge the work of Dr David Clark in making sure we got a fair resolution for our nurses, because having the nurses in our workforce feeling that they’re valued is the first step to making sure we get things right in the health sector. In the Budget speech, I gave my commitment to the professionals who work in our health sector that we will work with them to rebuild. We are in that space now, and I’m very proud that we’ve been able to make that progress.

We also see in this Budget a huge boost for operational funding for education to ensure that our schools are fit for purpose into the future—15,000 more teachers. We are making sure that early childhood education services are funded properly—the first across-the-board funding increase for early childhood education in a decade, and that is what is in this Budget today.

When it comes to housing, the 6,400 community and State houses that will be built make the first dent in what has been a deficit that has built up under the last Government. Be absolutely clear: this Government stopped the State house sell-off and now we’re building 6,400 more. Never again will we allow that stock that is so important to the well-being of New Zealanders to be undermined so much.

There are too many other areas in the Budget to dwell on too much, but I do want to talk about two in particular. The first of those is the funding for conservation. It is true that among the three parties of this Government we have made a commitment to a significant increase in funding for conservation. It has been the record of the previous Government to not fund conservation properly and to look to the private sector to fill in where the public sector should be. Finally, we have a Government that is committed to turning that around.

The matter I want to spend a little bit of time on now is the Families Package, because from 1 July when this Budget came into force, $5.5 billion will be rolled out over the next four years to improve the living standards of our families. There can be few things more important than knowing that the basics will be there. There are few things more important for children than to live in a house that is warm and dry and for their parents to have the income they need. I have been humbled by the people who have written to us in receipt now of increased Working for Families payments, of the Best Start payment, and, in particular, of the winter energy payment. What we are hearing from New Zealanders is that it is these basics that have worried them. The thing that causes stress in families is that they don’t have those basics, and we’re finally getting it right.

I also want to acknowledge the fact that we are starting to address the inequalities that have grown in our society, with a $16.50 minimum wage lifting to $20, paid parental leave out to 18 weeks—22 weeks now, and then 26 weeks by 2020. We are looking out for future generations. We have restarted contributions to the super fund that were stopped in 2009, and we will have a fund worth $64 billion that will look after future generations of New Zealanders.

This is a Budget that I am proud of. It is the first of three for this term of a Government that will build on the foundations that we have laid. We know there is a big job to do. We know New Zealanders have high expectations, but we have the balance right in this Budget. We’re being careful with our money, but we are finally getting on with building the public services that New Zealanders want and deserve. I am immensely proud of this Budget and I commend it to the House.

Hon PAULA BENNETT (Deputy Leader—National): Well, hello, fiscal hole; take a bow, Steven Joyce. The previous speaker, the Minister of Finance, the Hon Grant Robertson, should have started his speech with, “I am sorry.” to Steven Joyce and to the National Party, who pointed out exactly where we would be at this time. I can’t help but quote directly Cameron Bagrie who said, “I don’t like the term fiscal hole. Good policy should dominate over strict debt targets and economic cycles come and go which are often beyond government control. But the Labour-led Government’s fiscal hole is looking deeper by the day—and bigger than the $11.7 billion of additional borrowing that Joyce identified.”

This Government is not taking business concerns seriously, and they simply have to stop dismissing them. They don’t understand that for business it is the unknown.

Fletcher Tabuteau: Isn’t a general debate, this slot.

DEPUTY SPEAKER: Yes it is. Be quiet.

Hon PAULA BENNETT: Businesses don’t know what is coming and they got nothing out of this Budget. Businesses don’t know what’s coming—hell, the Government doesn’t know what’s coming. Here we have working group after working group after working group out there. There are over 100 working groups, and they are looking at everything from tax to industrial relations to—I mean, you name it: the environment, climate change. You name it; they are looking right across it. And businesses don’t know what is coming next.

They also don’t know what dodgy deal will be done between the Greens and Labour and New Zealand First to get the next piece of legislation over the line—

Hon Kris Faafoi: Who’s reviewing Simon? Somebody is; I know they are.

Hon PAULA BENNETT: —and that unpredictability is doing real damage to business. You should take this really seriously, Mr Faafoi, because, actually, this means jobs for New Zealanders. Actually, this means whether or not a business goes out tomorrow and employs another person. When they don’t know what will be delivered to them by the current Government, through the Budget they’ve just seen—as I say, more than 100 working groups, and deals that have to be done with parties that have pretty much nothing much in common and have to do a dodgy deal—there is uncertainty, and uncertainty in the real world means jobs.

Uncertainty means that someone in—and I am going to take the great electorate of Upper Harbour. Each electorate has its little claim to fame. Upper Harbour’s claim to fame—and I want to quote it particularly—is that they have the highest number of people who own their own home, with a mortgage. So what they care about is business confidence. What they care about is their ability to pay those mortgages. They are my “tradies done good”. They worked for decades, they saved their money, they took risks in their businesses, and now they’ve bought good homes, and they’re doing quite well, but they’ve big mortgages. They care about those jobs, they care about their business, and they do not like the unpredictability that they are currently seeing.

You’ve got to say that with the deals that are going on—you can see it—principles are out the window, so we no longer have principles driving people like the Greens. I’ve got to say, I didn’t agree with them often but I actually did admire them for standing by what they believed in, what they stood on, and their own core principles. Well, they’re gone now if they have to do a dodgy deal with New Zealand First to try and get something over. But as the Deputy Prime Minister often likes to say, I believe, and quite often in private, this is the cost of being in Government. Well, the cost of being in Government shouldn’t be people’s livelihoods and their jobs. It shouldn’t be business confidence crumbling, like we’re currently seeing. It’s obvious that the current Government doesn’t know what to do, as they’ve actually, you know, almost contracted out the role of governing to the working groups. But they have to take seriously the fact that businesses are losing confidence, and as a consequence are not spending the same in their own businesses or looking at taking on new people.

I want to talk about things like—I mean, let’s just do the list—strikes and the expectations of the public sector. They were raised by both Labour and the Greens during last year. So they raised expectations within the public sector that they would be getting double-digit pay increases on a percentage basis. And that might be the right thing. They can’t deliver on those promises now, and we didn’t see that in this Budget. We did not see money put aside for a serious Public Service. So we haven’t even started addressing doctors or secondary school teachers. We haven’t got to police yet. While we’re on police, we didn’t see in this Budget the funding for the extra 1,800 police that we were repeatedly promised during the coalition and during the deal. It’s even in the document. So they haven’t actually funded them. All they’ve done is take the funding that National had already put in—the extra funding for extra police—but there’s no funding for them, so they’re not able to deliver on that.

But the effect that now we’re seeing on the public sector around the broken promises is we’ve got, literally, parents now having to take days off work tomorrow because those teachers are on strike. Take some responsibility for it. We didn’t see it in this Budget, we’re not seeing it being taken seriously by this current Government, and I think that’s really serious. It’s the effect of those pay increases into the private sector. So what does it mean for them? Well, we don’t hear those recognitions from this Government. We don’t see those recognitions in the Budget. So anything from strikes to pay increases to the questions around industrial relations are dismissed and made a joke of in this House, but, actually, they are very real concerns for the business sector as they’re moving forward. Tax more, spend more, borrow more—that’s what we saw in this Budget.

And some will say, on spending, that it is time. In fact, I might say, on some of the spending, that it is time. If only that spend had gone to education and to health, like was promised so much, but what you would call this Budget in terms of education and health is, if anything, ordinary—ordinary. There was nothing extraordinary. There was nothing extra. We saw the big announcement last week—the Prime Minister coming back for her first week after leave to make that big, big mental health announcement of—

Hon Nathan Guy: What was it?

Hon PAULA BENNETT: —six mental health units. And let’s remember this: they took $100 million out of mental health—$100 million out of mental health—and then they added six units. Well, I tell you what, that’s shameful. That’s the big announcement that we saw last week. And, yes, we did hear murmurings from the Labour Government—you know, the backbench, going, “This is actually a bit embarrassing if this is the best that we can do.”

What we did see in the spending was not spending in education and not spending in health. What we saw it on was on fees-free. By the way, Treasury in this Budget are forecasting fewer tertiary students into the future. So not more; they are literally saying fewer students in the future. We saw the “Provincial Slush Fund”, as we all know, and, boy, are we seeing a lack of process in how that is spent. I’ve got to say the regions are literally laughing—laughing. They’re going, “Well, we’ll take our wee bit. Why wouldn’t we?” But actually what will be dished out and how it will is anyone’s guess—the particular mood of the day.

What we’re also seeing, of course, is more diplomats and the spending in the Pacific Islands, and one might argue that there’s merit in that—but at the cost of education, at the cost of our teachers, at the cost of what is needed in mental health? I don’t think so. I think the spending in this Budget is completely out of whack with the realities of what was promised last year repeatedly; the expectations that have been built up, and where they’ve actually landed.

So if this was a Budget that was serious about New Zealanders, a bit of advice: start taking business seriously. Start listening to them. Start recognising that what happens in business actually affects everyday New Zealanders’ lives. They need to be able to afford that minimum wage increase. They need to be able to take on the extra people. They genuinely want to, but they need a Government that is predictable. They need a Government they can trust. They need a Government that will stand up for them. And, secondly, spend where you said you would. Put your money where your mouth is when it comes to education and when it comes to health. We didn’t see that in this Budget, and it’s deeply disappointing.

Hon Dr DAVID CLARK (Minister of Health): I think that member, Paula Bennett, might have been reading last year’s Budget. I have a fear that she flicked the wrong book open and was looking at last year’s Budget, because this year’s Budget put the biggest boost into health spending in a decade. It put the first across-the-board investment into early childhood education in a decade. This was a Budget that was about health and education. It’s also a strong Budget that projects surpluses into the future to invest in the infrastructure that was neglected under that Government’s watch; that prior Government that neglected infrastructure for so long that it sees our hospitals with rot and mould in the walls, and leaking operating theatres in one part of the country.

This Government is proud to have a Budget that invests in New Zealanders; a Budget that lays the foundations for the transformation of our society and economy to rebuild the public services that have been neglected for so long. We also see the pathway to a sustainable low-carbon economy laid out in this Budget—a just transition. The Budget builds on the 100-day plan, and, of course, the $5.5 billion that was put into the Families Package. Instead of the tax cuts skewed to the wealthiest New Zealanders, in the mini-Budget that came before the Budget that $5.5 billion went in to make sure that the most vulnerable New Zealanders were supported to help their children in the early years of life, and, of course, money into the super fund—those long-term things that have been neglected under the previous Government’s watch.

And, of course, the Budget itself tells us that GDP growth is expected to remain strong across the forecast period. It tells us that unemployment is expected to continue to drop, down to 4.1 percent at the end of the forecast period, close to the Government’s goal of 4 percent, and that wage growth is good—expected to be 3 percent, on average, over the next five years. This is a Budget that is good news for working New Zealanders. Of course, into the future, those surpluses will help this Government with its aims to ensure that we do invest in capital expenditure—the expenditure that had been neglected under the previous Government’s watch—that we correct the infrastructure deficit that we’ve inherited, and that we also reduce debt over time.

Let’s not forget that that prior Government—the National Government—borrowed more than any other Government in New Zealand history. They borrowed more than any other Government in New Zealand history. They borrowed more than Muldoon’s Government. We have taken on that debt and we’re projecting surpluses into the future. They ran deficit after deficit after deficit, and now we’re projecting surpluses into the future. We’re also preparing for any economic shocks. This is a responsible Government that is projecting surpluses, that is growing the economy, and that is reducing unemployment. The debt will decrease into the future under this Government’s watch because it’s a responsible Government.

Let’s look at the capital spending. There is $10 billion more than the previous Government’s five-year window in the last Budget. So this Government is projecting more capital spending into the future and putting money aside for that purpose, because this Government looks to the long term, not just to the next election cycle like the previous Government did. We are going to fix that infrastructure deficit, because we can’t have leaky schools and hospitals that make people sick.

Of course I want to also, then, specifically talk a little bit about the health portfolio and the plan to rebuild our health portfolio and our health system, after years of neglect. Of course, the people that have worked in our health system over the last nine years have done that tirelessly and in challenging conditions, but they have continued to provide excellent healthcare for New Zealanders, and I want to thank the health workforce for continuing to do that under the previous Government’s watch. We know there’s been understaffing, and we’ve seen the discontent from the nurses as they faced the fact that they barely had a pay increase under the National Government’s watch and they had hospitals keeping vacancies open and stretching them beyond what was reasonable. Of course this Government wants to put that right. We are ambitious for New Zealand, for seeing our workers properly supported to do their jobs, and I am so delighted that the nurses have settled and done that, by a big majority, once they had confidence around the safe staffing arrangements that will be put in place to make sure that we do have fully-staffed hospitals in a way that we haven’t had over the last nine years.

In the health area in particular, this Budget set aside $750 million in capital expenditure to begin the rebuild of our health system—the biggest input in 10 years into the health system in capital terms—because the previous Government didn’t really invest in the buildings in our health sector. That’s why we have that rotten mould in the walls. The biggest amount they put in was $450 million, and that was in response to the Canterbury earthquake. Well, we’re putting in $750 million in our first year. In many of their years in Government, they put nothing in—no capital set aside in the Budget for our health system. Well, this Government takes a different view. We are looking out 10 years and seeing that there’s about $14 billion needed in the health system—$14 billion—and we are making a start, with the first capital allocation of $750 million, as we acknowledge that the workforce will need to ramp up to deliver a proper health system that will survive into the future, and that will provide the health services New Zealanders expect and deserve into the future.

We’re also making sure that people get the care where they need it. This Government invested in cheaper doctor visits for 540,000 New Zealanders who hold community services cards, meaning that their doctor’s bill will drop, on average, by $20 to $30 a visit—up to $50 in some cases. They will drop by $20 to $30 a visit for CSC holders—community service card holders—and that will make care accessible for those people. It will mean that they will be able to actually get the care that they need when they need it. But that previous Government did nothing. They were content to see GP fees raised by 44 percent under their watch. Well, we on this side of the House recognise that when over half a million New Zealanders every year say they can’t go to the doctor for reasons of cost, we need to do something about it. I’m very proud of the steps we’ve made in this Budget to address that issue.

Of course, also in this Budget we started to get real about a growing and ageing population in the health sector. We finally funded district health boards (DHBs) properly, after years of underfunding—the biggest investment into health, into the DHB funding, since the last year of the last Labour-led Government funding track. This Government takes healthcare for New Zealanders seriously, and that’s why we are making the biggest investment in health in a decade, because this Government cares.

Of course, we’re also going to make changes in the health sector. We are going to change it for the better, to make sure that our health specialists and our clinicians are supported to deliver healthcare that they want to deliver, not only with new funding but looking at the whole health system. There’s a once-in-a-generation opportunity, as we launch the review of the health and disability sector, to make sure that we’re fit for purpose for that growing and ageing population into the future.

In the debate itself that we had through this House, we heard various figures quoted by the previous Government about the investment that was needed and whether we were going to live up to our word on the investment. Well, we said before the election we’d put an extra $8 billion in, and we will deliver on that. This Government will deliver on its commitment over the forecast period to put $8 billion more into the health sector. We made that promise because we knew our political opponents would not match it, because they have underfunded health for so long. This was the first tranche of investment, $3.2 billion over the forecast period—$3.2 billion over the forecast period—and, of course, we’ve got two Budgets to come. We will get serious about the population and the need for support.

We’re also getting serious about mental health—something that the previous Government also neglected. They talk a lot about a $100 million contingency fund, and, of course, what many people out there won’t appreciate is that a contingency fund is a fund when you don’t have a fund. It’s putting money over to one side and saying, “Maybe one day we’ll spend it. Maybe one day we’ll sit down, have a conversation, and spend some of that money. Maybe we won’t. Maybe we won’t.” In this Budget, this Government spent $250 million straight up, not some “We’ll put $100 million over there and maybe we’ll spend it one day, maybe we won’t.” We spent $250 million straight up. We committed to spending that money.

This Government cares about mental health. We’ve got a mental health and addictions review that will report back in a few short months with some serious recommendations, I have no doubt, about change that’s needed in our system. But we’ve already chosen to invest in new models of care for integrated therapies in Canterbury and Kaikōura, putting mental health workers on the ground in primary schools, and rolling out nurses in decile 4 schools across the country. This Government is concerned with getting on with doing the things that we already know work in the mental health space. We’re not waiting around, but we will look to do more when the mental health inquiry reports back.

I’m proud of the investment we’ve made in mental health. I’m proud of the investment we’ve made in primary care, making sure people get those cheaper doctor’s visits, extending free doctor’s visits so that 13-year-olds now qualify for free doctor’s visits, and I want to acknowledge New Zealand First’s commitment to that, as well. On top of that, we, of course, have put in good capital spending to begin the rebuild of our health buildings, and we’ve funded DHBs properly for the first time in years. I’m looking forward to more. This was a great Budget for health; it was a great Budget for New Zealand.

Hon AMY ADAMS (National—Selwyn): Thank you, Madam Deputy Speaker. I do of course want to take a call in this third reading of the appropriations debate, where we reflect on this first Budget of this Labour - New Zealand First - Greens Government.

In my first reading on Budget day, or just after Budget day, when I talked to this bill, I reflected that you had to see it as a Budget of wasted opportunities. The opportunities that this Government inherited—the economic platform, the strong and growing surpluses, the job creation rate, the GDP rate—made us one of the envies of the Western World and, frankly, across the OECD. Some people have said that you haven’t had a finance Minister as lucky as Grant Robertson since the Second World War. They have this tremendous platform of economic opportunity, and yet what we’ve seen is a waste of that opportunity and a squandering of the opportunity, and, actually, in the months since the Budget, the position has become so much worse, because not only are they squandering the opportunities that New Zealanders worked so hard over so many tough years to accumulate but they’re now ensuring that the growth machine slows down to a crawl.

It’s always seemed to me that as a finance Minister, you have two fundamental roles. One is to think very carefully about how you invest and spend the opportunities that New Zealanders have given you through their hard work and their taxes—and on that count, I label this Budget a fail—and the second job is to make sure that the actions of your Government, the policies, and the economic direction that you set are going to support that growth going forward. I’m going to come back to that, because there is no question to everyone now in this space—with the possible exception of Grant Robertson and Jacinda Ardern—that the economy is slowing down, the indicators have taken a turn for the worse, and the direction of travel is all wrong, and yet the very person who’s charged with ensuring that economic growth is asleep at the wheel. That is an unforgiveable sin being committed by this Government.

We’re hearing from the Government now that, somehow, the downturn in confidence and GDP and the upturn in unemployment and the very negative projections being released by our economic agencies and commentators—sometimes we’re hearing from the Government: “Oh well, it’s just part of the international cycle and a part of the international climate we’re in.” Well, that’s simply not credible, and I point very easily to the fact that in the rest of the world, the OECD growth average is still nearly 4 percent. It is 3.9 percent per annum growth, which is where we ourselves were just 18 months ago, and yet it has been squandered under this Government.

If this was the economic cycle of the international economy, we would be tracking with the world. The reality is we are going south when the rest of the world is still performing very well. Our biggest trade partner, of course China, is growing at 6.7 percent. Our second-biggest trade partner, Australia—their growth rate is continuing to improve. When you look at OECD rankings on business confidence, we have gone from the top of the world to, frankly, the bottom in 20 months. Now, that is not the story of an economy that’s going backwards because of an international climate; that is the story of a domestic economy that is going backwards because of the mismanagement of this Government.

Instead of coming to the House and acknowledging that there are indicators of concern and that we’re going to need to put plans in place to address it, what do we hear from the Government?

Hon Tim Macindoe: They call them junk.

Hon AMY ADAMS: We hear that the businesses don’t know what they’re talking about. Business sentiment is “junk”, it is “biased”, it is “perception”, and it is “bulldust”. We hear: “Businesses are just wrong, and if they only understood the Government better, it would be fine.” Well, I put more faith in the opinions of the people who are actually running businesses than in the opinion of a finance Minister who’s never run a business. He’s never run a business. He has never, in fact—to my knowledge—even worked in a private sector business, and yet Grant Robertson has the arrogance to stand here and tell the business community that they are wrong. The Prime Minister has the arrogance to tell the business community that they just don’t understand it properly. Well, I’m sorry, I say to the Government, but that is unforgiveable dismissiveness of the core engine room of our economy.

There is no doubt that when you look at, for example, Treasury now talking down the growth prospects of this country and when you look at the Reserve Bank having come out last week saying that the official cash rate (OCR) is now going to be lower for much longer—and that is a very simple report card from the governor, which is him saying, “I now have less faith in the economy than I did three months ago.”, because when the economy starts to heat up and pick up, then the governor will move the OCR. The fact that the governor is now saying the OCR is unlikely to move until 2020 says that there is less faith now in the New Zealand economy. In fact, when he did talk about moving it, he indicated that if this slow growth continues, we could see the OCR drop by another 100 points.

Look at the dollar over the last few weeks. We have seen the dollar drop away sharply as, again, international markets are looking at New Zealand; they’re looking at our economic performance, and they’re not liking what they see. This is the vote of no confidence in this country’s performance from the international economy, and the only thing that has changed is the Government. The businesses are as hard-working and as focused as ever. The country has the same exquisite natural resource potential to sell to the world. New Zealand continues to make and sell what the world wants. We’re still getting very good export prices. The only reason the economy is slowing, and slowing rapidly and slowing patently obviously to everyone except Grant Robertson, is the change of Government and the uncertainty, the poor policies, the lack of process, and the dismissive approach to how the economy functions that we’re seeing from this Government.

I mean, to have a Minister for workplace relations who will say to business, “If they don’t like the extra costs and if they can’t handle the extra costs, well, perhaps they should go broke.”—it was an appalling statement. It was an appalling statement.

We’ve just heard from David Clark that, somehow, National borrowed too much money under the global financial crisis and the Christchurch earthquakes. Well, I challenge Dr Clark to go to Christchurch and say to every one of those businesses that we kept going through helping them pay for their workers when they couldn’t return to their businesses that every single dollar that New Zealand put into the Canterbury recovery was wasted borrowing. That is an outrageous statement, and if this Labour Government can’t see the difference in borrowing through a global financial crisis and a series of natural disasters like we’ve seen in Christchurch, Canterbury, and Kaikōura, then they have no right to sit on the Treasury benches and claim to represent New Zealand.

Today, we’ve got BNZ coming out saying that actually New Zealand could now be looking at a period of stagflation. Now, I’ve become a bit of a pointy-headed watcher of the things but, essentially, stagflation—I know Madam Deputy Speaker will understand it well, but let me just talk through it—is a period in which we see inflation lifting at the same time the economy is going backwards. That is now the trajectory that independent economists are saying New Zealand is on. That is an utter disgrace and it lies fairly and squarely at the feet of this Government, but instead of acknowledging it, changing, pivoting, or thinking about what they might need to do differently, instead of providing the certainty that businesses are clamouring for, they stand here in this House and say, “Business is wrong; we are right. We, the Labour Party, know far more than anyone.” It’s fairly reminiscent of what they’re saying to us on the waka-jumping legislation, as well.

In this Budget, what we’ve seen is Labour locking in a trajectory of expenditure which will continue to ramp up in years to come, because Grant Robertson is already spending those large surpluses that we left him. But he forgets that they’re not promised to him. If economic growth goes backwards, revenue drops. Every 1 percent drop in revenue is about $800 million a year the Government doesn’t have to spend. I say to you very clearly, Madam Deputy Speaker and this House, that what happens when expenditure is going up and revenue is falling is one of two things. They’ll either put it on the credit card for future generations, add it to the bill—they’re already spending $17 billion more than we would have had under a National Government. They’re spending $17 billion of debt in the good times. When that economic growth line starts to deteriorate and when our income as a country goes backwards because Grant Robertson is asleep at the wheel and had his head in the sand about our slowing economic position, I tell this House now that they will come after the money of hard-working New Zealanders.

We’ve already seen $2.5 billion in extra taxes from this “no-tax Government”. Now we’ve got Michael Cullen beavering away in his tax working group. This Government is going to look to take more from the pockets of hard-working New Zealanders. They’re going to look to ramp up debt because they cannot control their spending. They’ve promised too much, they didn’t understand the costs of Government, and they paid way too much for the price for Winston Peters and his motley mob. This is a Budget of over-promising and under-delivering—far too much expenditure in coalition negotiations, poor quality spending—at the same time as doing nothing to support our economic growth room. Small businesses up and down New Zealand are worse off for it.

FLETCHER TABUTEAU (Deputy Leader—NZ First): This is the most frustrating and inept contribution from the Opposition that I have heard in years. I’d take offence at being called motley, except that it came from the member who can’t get her arguments straight. So let’s just let that pass, shall we. She spoke about a governor leaving the inflation rate, as if it is some kind of indictment on this Government’s performance, and then she speaks about stagflation. And yet, if there was such a thing about to occur—previous speaker over there; I can’t even remember your name, my apologies—if there was such a real thing happening, the Reserve Bank Governor would have reacted to that with the adjustment of the official cash rate (OCR). What has actually happened is he has made the right decision. The economy is carrying on on its positive course of more than 3 percent per annum growth over the next forecast period. He has made the right decision, because you don’t want to over-stimulate the economy because then businesses do make the wrong decisions about what they’re doing, and you don’t want to send the OCR in the other direction, because then you are constraining businesses and the opportunity to invest. So the Reserve Bank Governor is incorrectly and inappropriately being attacked by that previous speaker, and it is incredibly, incredibly frustrating to listen to.

She should in fact heed the words of her two previous finance Ministers, who were in that party at the time they were in Government, who spoke about wisely quoting growth statistics and data at the appropriate time. The previous speaker spoke about a downturn in the economy. What she failed to highlight to the House was this was a short-term, perhaps even quarterly, projection, and the long-term forecast for this economy under this Government is for a long-term period of sustained growth, because economists from around the world and here in New Zealand all agree that in that long term we have the settings right and this economy will continue to grow as we forecast when we came into Government. So let’s get those facts straight, shall we?

She spoke of the dollar decreasing like it was an indictment on this Government, but yet again I ask her to reference her previous Ministers of Finance, who spoke of this very thing in their time when the economy was in a downturn. Imagine that, under National! Yes, the economy went into a downturn several times under their governance, and what happened? The New Zealand dollar decreased in response. Those are macro tools responding as they should to an economy that is functioning properly, which is almost quoting Joyce verbatim in response to questions in the House in his time as the finance Minister. That is exactly what should happen, and it is fantastic for New Zealand business that this is happening, because if you’re an exporter operating in New Zealand right now, you’re saying “I’m in for a windfall because”—again the Opposition hasn’t pointed it out. They talk about business confidence, and, yes, there’s work to do there, but they haven’t pointed out to the House that, actually, businesses are investing in capital, they are investing more in themselves than they have for a very long time, and they’re doing it right now despite the supposed confidence issue.

What that means is those very businesses who have made that investment in themselves and who are exporting overseas are going to reap the rewards of a low Kiwi dollar. They are going to make more money on every sale that they make overseas. What that means—again, not mentioned on the other side of the House—is more jobs at a time when unemployment is at its lowest rate we have seen in a decade. The fundamentals of this economy and the fundamentals set out by our finance Minister are the strongest and the most reasonably well-thought-through fundamentals that we have seen in a long, long time, and New Zealand businesses are actually reaping those rewards. So it’s fantastic for business, and I wish them the best of luck in such a wonderful period of time to be exporting overseas.

As the Opposition were speaking, I made some notes that I wanted to speak to. I quickly wrote down the words “district health boards” and “the health sector”. I wrote down “superannuation”. I wrote down “our provinces” and “our rural communities”. I wrote down “homes for Kiwis”, and I wrote the words “infrastructure from Auckland to our smallest city”, and I wrote the words “education and training”. And then I had the time to reflect on those words and realise that these are the issues that this Government has been handed from the previous Government, who did absolutely nothing in all of those things, and then they have the audacity—the audacity—to stand up and accuse us of not doing anything or not doing enough.

Clayton Mitchell: Where were they?

FLETCHER TABUTEAU: Over nine years, where were they when New Zealanders were put out on the streets and became homeless and were living in cars?

Hon Dr Nick Smith: Building houses.

FLETCHER TABUTEAU: No, you were not building houses, Nick Smith. You were doing a tour of cemeteries and—

DEPUTY SPEAKER: Actually, I wasn’t doing any tours of cemeteries.

FLETCHER TABUTEAU: Madam Deputy Speaker, I did refer to the member by name.

DEPUTY SPEAKER: Don’t bring me into the debate.

FLETCHER TABUTEAU: I did refer to the member by name.

DEPUTY SPEAKER: Are you arguing with me?

FLETCHER TABUTEAU: I’m simply—

DEPUTY SPEAKER: You’re wasting your time. Don’t bring me into the debate.

FLETCHER TABUTEAU: I apologise if I did so.

Hon Judith Collins: Ha, ha!

FLETCHER TABUTEAU: Ha, ha! Judith Collins, jeez! Madam Deputy Speaker, it is, as you can tell, quite frustrating, and I get quite heated listening to inept contributions from the other side.

So Paula Bennett spoke about—what did she do? She dipped into the cliché bag from the National Party and spoke about tax and spend, all the while accusing us of not doing enough, not spending enough on education, saying that we hadn’t spent as much as they did in education. And yet that same cliché got pulled out about a tax and spend Government.

Matt King: You’re spending it in the wrong places.

FLETCHER TABUTEAU: Well, contributions from this side of the House were very clear that, where it was needed, the money was spent. And in all those lists, in all those headings I read out—infrastructure, health, mental health, education, and superannuation—this Government has already done more in those areas than that Opposition did in nine years. So I’m glad I got to speak after those who presume to lead the Opposition voice in this area, because I am glad that I can highlight the flaws in their arguments, because they are frustrating to listen to.

Paula Bennett spoke about the regions laughing—

Hon Judith Collins: Hon Paula Bennett. Use her title.

Matt King: Honourable.

FLETCHER TABUTEAU: I’m doing it appropriately, thanks.

DEPUTY SPEAKER: Actually, in fairness, her title is the Hon Paula Bennett.

FLETCHER TABUTEAU: Yes, it is. She spoke about the regions laughing. So I think it was Dr David Clark who got it right. I think she was reading the wrong Budget, because the regions were laughing when she was in charge of the Tourism Infrastructure Fund, when she announced $25 million over three years to fix the infrastructure problems of our regions—$25 million over three years to fix our tourism infrastructure problems. That’s when the regions were laughing.

I have had the privilege of travelling around our regions over recent months to talk about the Provincial Growth Fund, and it has been received incredibly well.

Hon Judith Collins: Who were they?

FLETCHER TABUTEAU: And I tell you how I know this: everywhere I went, there was a National MP talking to me about how we could do more. That’s the reality of the situation, and so I am proud to stand up and correct the contributions from the Opposition and make the statement that this is a good Government, with a good Budget, and things are on the up. Thank you, Madam Deputy Speaker.

Hon JUDITH COLLINS (National—Papakura): Madam Deputy Speaker, thank you so much for this opportunity to take a call in this debate. Well, that contribution from Fletcher Tabuteau was enlightening. It was enlightening to me because I’ve always thought, “He’s a nice enough chap. He’s the Deputy Leader of the New Zealand First Party. Why is he not a Minister?” And his speech just enlightened me. Actually, to call across to the Hon Amy Adams and say he doesn’t know her name, I have to say, says it all really. He doesn’t know much. But, anyway, it’s good, because he probably doesn’t know my name either! And I’ve gone to all the effort of learning his.

First off with any Budget, I think it’s good to go back to the Hippocratic oath, really, for doctors’ training, which is “First, do no harm”. So did this Budget do some harm? Well, it certainly seems to have done a bit of harm, because we have been hearing today some excuses from the Government side—

Hon Kris Faafoi: Maybe Simon should take heed of that too?

Clayton Mitchell: Only Simon’s rating.

Hon JUDITH COLLINS: —oh, please, call out; I just love it when they do. When they say “Look, the economy is tanking because the world economy is tanking.”—the dollar coming down, Mr Tabuteau told us, was an excellent thing because that means we’ll have more money. Well, that must be why President Erdogan of Turkey is so thrilled to bits that the lira has tanked in a major way. If a low dollar was the reason for financial success, then Mexico would be the richest country in the world, not the United States of America. There would be a reason for that. The dollar has been tanking because of the lack of confidence in this Government. Yes, there will be some short-term gain by those who are exporting because they will immediately get more New Zealand dollars for their product. The problem is that those New Zealand dollars won’t buy them anything more when it comes to anywhere else. So if you’re looking at anything where fuel is used—petrol and diesel—not only have we got these massive taxes put on in the Auckland region, and also, no doubt, going to move to the other regions soon, but we also have the fact that oil and, particularly, petrol and diesel go up as soon as the dollar drops. It is almost that day. So what I am seeing around the country, and I’m sure that my colleagues have too, is that petrol prices and diesel prices have gone up under this Government. And they will continue to go up because they see these particular products as ways that they can grab more money, and also because the dollar has been falling.

It’s interesting also to hear today this contribution from the Government as another excuse for the effect of the Budget that, actually, the world is going through turmoil and the world economies are. Well, that must be why Australia’s economy is not tanking these days! Why would that be? Oh, probably because they have a sensible Government that’s doing its best, encouraging resources to be used and encouraging mining. Mining is getting itself back up again in Australia—infrastructure spend taking our carpenters, taking our tradespeople, being able to pay them what they’re worth. And what have we got from this Government? Oh, I know, we’re just going to—what? Nothing really, actually. We don’t want foreigners, we don’t want their money—oh, we do now because suddenly we’ve worked out that we can’t actually build anything without that money and without these people investing in New Zealand.

Why business is very upset with this Government—and bear in mind that this is only a matter of months; it’s not even a year since this Government came in—is that they’re not being listened to, and they’re being patronised by people who have never been in business. So they’ve got a Minister of Finance who’s never been in business, who’s never had to actually go out, sell a product, be able to look at whether there is a profit in it, employ people, and put his own money on the line. And you’ve got a Government full of people like that—people who have worked in places where they’ve been public servants, which is an excellent thing, of course, but that is all that their experience is, in most cases. And they’re talking around saying, and we had the Prime Minister doing it too, “Look, business confidence—it’s only confidence.” Well, actually, it’s that confidence that gives people, strangely enough, the confidence to go and put a mortgage on their house, borrow some money from the bank, and go and buy a business. It’s also that confidence that gives someone the ability to say to someone who wants a job, “I can take you on. I can take you on as an apprentice. I can commit to you for the next so many years because I believe my business is going to be thriving. It will be doing well.”

At a time when we’re supposed to have all these houses being built everywhere, why is it that we don’t have all these houses being built everywhere, any more than there were last year?

Maureen Pugh: Why is that?

Hon JUDITH COLLINS: Why is that? And the answer is that there are no more tradespeople than there were last year. In fact, a whole lot have gone to Australia because they can get jobs there because, strangely enough, their economy is booming and, strangely enough, ours isn’t.

And then we have things such as “Is this Government going to back business when things go a bit wrong?” Well, I don’t think they are. I was very concerned to hear, the other day, Adrian Orr, the Governor of the Reserve Bank, talk about hoping and, basically, crossing fingers and thinking things might be OK. That’s not the sort of confidence that people want to hear. And possibly that’s because he’s telling the truth: that he’s not that confident about the New Zealand economy. We’re very fortunate that we have a diverse economy, that we have a lot of people who sell products overseas, that we are actually a very, very diverse economy. We don’t just sell dairy products; we sell a lot of different other things, including tourism. But all of those things actually rely on people who have the courage and the wherewithal to be able to put investments into businesses and to employ people. That’s what happens. And all they’ve seen from this Government is attack after attack after attack on business.

The latest one is, of course, these attacks on business using the unions. I saw today that Pacific Steel Group is now going on strike. Pacific Steel is, I think, one of only two steel producers now in New Zealand, based in Otāhuhu, in Auckland. That is actually a really big payer of people. It is an industry that there’s not much left of in New Zealand. It is a very valuable industry. We’re lucky to have it, because if we didn’t have that and the Glenbrook steel mill, we would have no steel being produced in New Zealand. That means that every piece of steel we get would have to come in from overseas, so we would not have this very high quality steel produced with very good efforts around the environment and also health and safety for staff, and we would instead simply bring in steel from China and other countries like that, where not necessarily all the same care is taken.

So why would any union want to bash up one of the very few steel producers left in New Zealand? The answer has to be because they think they can, because they have a Government that they know is going to support them. And when was the last time that we saw nurses threatening to strike? I don’t think I can recall that in my lifetime. We’ve got teachers striking tomorrow. A lot of staff in this building are taking some days off, some holiday time, because they’re going to stay home and look after their school-age children. I don’t remember this happening in my lifetime.

What I do see at the moment is a re-energised union movement, which certainly does have a place in a lot of big business, but also that re-energised union movement is not necessarily about their workers, and that’s what worries me. When we have people like the E tū union—I think that’s the one that Andrew Little used to run, isn’t it? Is that the one? Yes, I thought it was—running around trying to destroy an industry because they can, I am very concerned about why business confidence is dropping.

We’re hearing about some of the changes coming through, with union reps being able to demand and just move into workplaces, on to farms, into factories, and into businesses. No one else can do that. Everyone else has to go through a health and safety induction. Everyone else has to sign in. Everyone else has to get permission, except these particular people. And why should that be? Why should that be? The police can’t do that. The Search and Surveillance Act doesn’t allow that to happen, and yet anybody who’s a union rep can just go in and do it. I think business is right to be frightened of this Government, and they’re frightened of this Government not because there is any particular ability over there on the other side in Parliament but because they don’t know what they’re going to do next; because they believe, rightly, that this Government has not a clue about the effects of what it’s doing, and it’s all bad.

Hon SHANE JONES (NZ First): On the sensation of alarm and fright, the last speaker, Judith Collins, has obviously begun to project her ability to frighten the members of her own caucus. She has raised, in the context of this speech, confidence. I am confident that the breadcrumb trail related to the current woes that prevent the Leader of the Opposition participating in this debate, because he’s now worried less about the business confidence in New Zealand firms and boardrooms than about the confidence of the people around him—without a doubt, that information has been selectively used to destroy that particular politician. Now, we have our theories as to who’s doing the leaking, just as I have my theories as to who’s doing the leaking from the police, but I’ll speak about that at a later date.

Let me now dispel a few misconceptions about the $3 billion Provincial Growth Fund. I identified today—and I have to say, a number of the questions that were asked of me today are not unreasonable because they’re a reflection of the person on the other side of the House who has to hold me to account, and that’s not unreasonable, that the pint-sized representative from Epsom should try to extend the shadow of his influence over the provinces. I can actually provide him with the political form of a Shetland pony to arrive at these places, but he will find that a great locomotive called provincial growth, “modest Matua Shane Jones”, has already arrived in town.

Now, what are some of the provincial growth initiatives that this Government is pushing? I wait with bated breath to hear what my Labour colleagues will return back to Parliament with in several weeks’ time, as they venture forward into that area politically forsaken by the National Party of Eastern Bay of Plenty. I give my word that I will advocate with my fellow Ministers that we share the fiscal lucre, fiscal wealth, fiscal medicine, with that part of the country.

It pained me that we had to turn down a signature project developed by the last regime called the Ōpōtiki Wharf, but we had to stop at $4.85 million committed by the last regime in due diligence, which got out of control. Now, it’s not unreasonable that I show on a regular basis not only are we capable of saying yes to projects; from time to time we have to say no.

Now, I said earlier today that of the various sins referred to in the Good Book, in politics envy is a very corrosive one. Now, I wasn’t talking about envy of an anatomical nature; I was talking about the envy that drives a lot of the questions which are designed not only to trip up this side of the House—a physical impossibility, because we are like the trees that we’re growing: erect, roots down deep into the provinces, and regularly watered with appropriate measures of fiscal waiora, water. So I don’t mind that we’re being constantly challenged, because there is a robust process, and despite the list member for Epsom alleging that there is no transparency, there is not only transparency; there is a great deal of rigour.

Now, where he calls for transparency in terms of financial transactions between the Crown and a third party, go and say to the other organisations such as Callaghan Innovation and the Skycity Casino—no transaction that’s governed by confidentiality can be spilled out into the totality of the public. To do that reflects not only bad faith but a very shallow, short-term, and disappointing approach to growing the regions, because our approach is long term. That’s why the $3 billion fund is going to lead a host of legacy projects and legacy investments.

But I’ve spoken enough about the $3 billion fund, because it announces itself everywhere it goes, and the fact that we’re going to partially use it to drive KiwiRail—an organisation, an entity, driven into the ground, neglected, and forgotten about by the last regime. We, with our new chair of KiwiRail; we, with the body of people, an entity chaired by Wayne Brown, formerly our mayor of the Far North District Council—they are going to bring back further possibilities of how the Provincial Growth Fund can aid and grow infrastructure.

I want to touch for a moment on the Hon Judith Collins’ references to the dollar. Now, she does not understand that the nature of our economy is such that the dollar floats. The dollar is a natural stabiliser—something that Steven Joyce, with tedious regularity, would point out to the House.

Now, I go back to do the days when the dollar fell to 39c. I go back to the days when in the fishing industry, the average long-run dollar was 55c. The fact that the dollar is dropping—it enhanced wealth opportunities; it improves the terms of repatriating earnings back from overseas—is positive for the regions, despite the best efforts of the Leader of the Opposition to go to every nook and cranny around regional New Zealand and become more unpopular. I don’t really care if he wracks up these bills. I genuinely accept that’s a part of what it takes to move around Aotearoa, but what I do object to is that people in his own caucus are now practising such a corrosive and destructive type of leaking behaviour, because I can’t see how they can be an effective Opposition when they’re turning to devour themselves.

We have every right to expect a formidable and reasonable Opposition to hold us to account. It’s only disappointing that they’re now falling and sinking their fangs—well, they’re not fangs, really; they’re false teeth—into the breasts of each other.

On the question, however, on particular industry groups, forestry is an obvious winner. Forestry is a key feature of why the Overseas Investment Office changes are overdue. The last regime allowed the process to remain grit-riddled. It remained stodgy. We’ve come in and we’ve said, in terms of foreign direct investment to grow this valuable sector, to increase the size of the botanical lung of the nation, to draw the carbon emissions out of the atmosphere so that future generations will thank us—that is a practical contribution.

Now I know for a fact, because I have the paperwork, that Graeme Hart and his associates did approach the John Key Government—I have the paperwork. That particular proposal bears a striking resemblance to the billion trees strategy that was announced in the formation of our coalition Government and led by our leader here, Winston Peters. So I don’t care how many statements the member for Nelson seeks to make, because at the point at which those statements of defence are uttered and laid out, if necessary, I’ll provide a small level of paperwork affirmation. So forestry is a definite winner.

We do also have profound development options for fisheries. We’re not going to follow the pathway of “NAIT’s Guy”; after failing to create decent system to track animals, he then decided to track—

DEPUTY SPEAKER: I think you need to use the proper name.

Hon SHANE JONES: —fishermen—Nathan Guy; apologies. Apologies, Madam Deputy Speaker. We’re not going to follow that particular pathway and subject the fishing industry to some sort of State commercial surveillance; we’re going to support the Minister of Fisheries to deal with the legacy problems in the fishing industry that have been around for well over a decade. At that point, whether there’s a case for camera surveillance to augment electronic surveillance, then we will consider it at that stage.

Now, these are business-friendly decisions. These are pro-industry steps that we’re taking in terms of our narrative. Forestry—long-term approach, significant amounts of investment capital; fisheries—stripping red tape; aquaculture—a further area sadly abandoned and not tended well at all under the stewardship of the last regime, but already we are receiving applications for people wanting to grow the value of the aquaculture sector via the Provincial Growth Fund. Subject to it being consistent with the criterion of the Cabinet paper, subject to it passing muster with a robust set of decision makers, including the independent economic appraisal committee, I have every confidence that these key industry areas will grow in wealth, health, and jobs.

Hon PAUL GOLDSMITH (National): Well thank you, Madam Deputy Speaker. So here we are. We’re talking about the legislation that follows on from the Budget, and we saw a lot of spending, a lot of borrowing, some extra taxing, and very little about earning more as a country. The number one challenge for New Zealand, as it has always been, is: how do we maintain our international competitiveness in a tough world? The rest of the world doesn’t care about New Zealand. We have to continue to provide goods and services that people want and that they’re prepared to pay for at the best price, so that we can make a living in a world and continue to sustain the high living standards that we have in this country and have the opportunities for young people to get jobs and to be able to afford to pay for good quality healthcare and good quality education and welfare when people get into trouble.

That’s why having a strong economy is so important, and this Budget was based on the prospect of 3 percent growth in GPD—a little bit less than what we had in the last few years under the previous Government, where we were getting close to 4 percent after years of strong, stable, predictable Government. We saw 245,000 jobs created in the past two years, which gave real opportunities throughout New Zealand and through the regions. It’ll be interesting to know whether all the efforts of Shane Jones will lead to anywhere near as many new jobs being created in the regions than we did over the past couple of years based on good, sound, sensible, fiscally responsible, and careful spending. So time will tell—time will tell—whether we see more jobs in the regions in the next couple of years than we have seen in the previous couple of years.

But one thing we do know is we’re not likely to be seeing the 3 percent growth in New Zealand that was predicted only a few months ago in the Budget. All the signs are that it will be somewhere closer to 2 percent, and why? Well, it’s certainly not the international situation, because the US economy is going gangbusters at the moment. New Zealand has the highest terms of trade, virtually back to the 1950s; we should be absolutely coining it at the moment and continuing to do well. But we’re not; we’re faltering—and why? Well, I think a big part of the reason for that is the growing lack of confidence—business confidence—that we’re seeing across this country as the result of all the uncertainty that this Government is bringing in.

People listening in to this debate on their crystal sets and TVs will be wondering, “What’s all this fuss about business confidence?” Well, the fuss about business confidence is that, ultimately, people get jobs and opportunities, and people get options to live a successful life, to care for their family and provide for their family, basically, if there is a good development of jobs and a strong economy. Jobs and opportunities only come from somebody making an investment. Whether it’s starting a new business, hiring a new person, building a new plant, starting something new, or taking a risk, it all comes back to somebody or a company saying, “I’m going to invest this money in this venture and I’m going to create a new job.”

Now, why would you do that at the moment when you’re not sure whether you’re going to have to pay capital gains on that investment?

DEPUTY SPEAKER: Don’t bring me into it.

Hon PAUL GOLDSMITH: Why would anybody? Why would you be so sure about making a major new investment if there’s so much uncertainty about what the industrial relations climate is going to be like—we got more strikes in the last nine months than in the last nine years—if you’re unsure about whether you’re going to be able to be internationally competitive and still pay one of the highest minimum wages in the world that will be developing in the next couple of years; if you’re unsure about the immigration policy; if you’re unsure about the foreign investment rules, in which we’ve basically put up a sign saying to foreigners, “Clear off. We don’t want your investment”—unless, of course, you have the special exemption such as Shane Jones has with this very strange and murky power that New Zealand First and Mr Jones have within this Government.

Hon Shane Jones: Power Ranger! Power Ranger! Power Ranger!

Hon PAUL GOLDSMITH: It seems—that’s right. He seems to have this dark hand that controls the levers of power in this Government in an unusual and strange way so that he can get anything he wants out of the Labour Government, out of Jacinda Ardern and the Greens. When Shane Jones calls, the money just tumbles out. So they don’t have enough money to keep their promises on mental health, on education—all sorts of areas where they haven’t kept their promises—but the money flows for him.

And the sad thing is, notwithstanding the money flowing for him, there has been little evidence so far that we’re going to get good value for the money that is flowing in his direction, and that is some of the questions that we had today. I’m glad the previous speaker, Minister Jones, indicated that those questions were worthwhile. That’s not what he said an hour or so ago. He said that they were, quote, “paltry and trivial”, and he has a long record of attacking me for asking impertinent questions in this House such as: what are we going to get for $3 billion? I mean, who would have thought—who would have thought—that anybody in this House would have the temerity to stand up on their hind legs and ask a Minister what we’re actually going to get for $3 billion?

We know that New Zealanders are uniquely resourceful and entrepreneurial people, and they could do something with $3 billion. We know that New Zealanders, if they had that money in their own pockets to invest in their own businesses, and to have that money to invest in their businesses and their decisions, they would create a lot of wealth and a lot of things would happen. We’re taking that money off them and giving it to Mr Jones to spend, so there is a high burden on him to ensure that he creates more wealth and more jobs out of that money than the money that was taken out of the hands of New Zealanders, and so far we haven’t seen much evidence.

We’ve got $485 million being spent on forestry, we’ve heard in the last couple of days; we don’t know what we’re getting for it. We know we’re getting—apparently, so he claims—2,000 extra jobs. Well, time will tell—2,000 extra jobs—I think that works out to about quarter of a million per job. That’s not very good. We’re going to get a few trees—we don’t know how many trees—and we’re going to save $3 billion, apparently. Where the figure comes from, who knows? He just sort of plucked it out of the air. I think he’s forgotten that there is the $3 billion fund that he’s talking about, but now he thinks he’s going to save $3 billion, based on something relating to the climate change proposition.

I think even with the best will in the world the amount of trees that might get planted under this scheme might—I don’t know—reduce our obligations by maybe 5 percent, maybe 10 percent. Is he saying that’s $3 billion worth? Is he saying that New Zealand, somewhere in 20 years’ time, is going to write a $30 billion cheque to somebody for climate change propositions? I can’t quite see that happening, and I don’t know who we’re going to be writing the cheque to. But anyway, so, what—

Hon Willie Jackson: Get to the point.

Hon PAUL GOLDSMITH: The point I’m trying to make, Mr Jackson, is that one thing we do know is that we’ve got $3 billion coming out of the pockets of New Zealanders and going somewhere. We know that there’s $3 billion, but we don’t know what we’re getting for it, and the Minister for Regional Economic Development refuses point blank to release any information about what we’re getting, any of the funding agreements, and any detail about what we’re actually getting for the money, and his idea of openness and transparency in Government is to tell nothing and say nothing of any information whatsoever about that money.

So we’re left here all looking and saying, well, interestingly, nearly half the funding is going to Northland. Well, that’s interesting. Only 2 percent is going to the whole of the South Island—well, that’s interesting. So there is a sort of a strange calculus going on as to how the decisions are made, and because of the lack of transparency that we are seeing in the whole approach that the Minister has taken and that strong hand that he has somewhere in the deep workings and mechanisms of this Government to pull various levers in his direction, we’re left asking the question: do we have any confidence that this money will be spent wisely?

I think the only point I’d make is, absolutely, we all back the regions of New Zealand, and we do want to see them do well, and we do want to invest in those regions, particularly in the area of infrastructure for tourism. About a quarter of the money that Shane Jones is talking about for the Provincial Growth Fund is money that the previous Government was spending already in helping local government help deal with the infrastructure costs of the tourism industry, for example.

So we agree with that, and we want that to continue to be funnelled through to the regions so that they can do well and deal with the costs of tourism particularly. But what we do worry about is the other three-quarters—a big chunk of that could be very poor quality spending, and it is not as if, as we’ve seen every week, there is more money than we know what to do with in this country. There’s a lot of pressure on this Budget. The Government is facing strikes in every direction. It’s not keeping its promises, and yet it seems to be quite happy to continue to have large amounts of poor quality spending in this area under Shane Jones.

Hon WILLIE JACKSON (Minister of Employment): Thank you, Madam Deputy Speaker. What a shocking contribution from that member, Paul Goldsmith. Particularly—

DEPUTY SPEAKER: I’m sorry to interrupt the member. This is a split call—bell at one minute.

Hon WILLIE JACKSON: Thank you, Madam Deputy Speaker. Particularly, criticism of the—

Hon Paul Goldsmith: It’s not even worth 10 minutes.

Hon WILLIE JACKSON: —oh, I’d love 10 minutes, but you gotta play by the rules.

The “Hukapapa Man”, as we know him, Minister Jones—pure as snow, as he would describe himself. It was terrible criticism given the impact that that provincial fund is making at the moment. I absolutely compliment our Minister for Regional Economic Development in terms of what he’s doing, and we had no problems, unlike that member and other members of the Opposition, in terms of supporting people in the North. What—should he just give up, Mr Goldsmith; give up on your own because you’re related? Cut that out. There are no thoughts of nepotism whatsoever. It’s total support for good business and good strategies.

It’s ironic that I stand today, and it’s a sad state of affairs for us as Māori that we’re celebrating a Budget that supports warm homes, employment, and investment in health—all of that has been done with this Budget, and Māori are very pleased with this Budget—despite the nonsensical rubbish that we’ve had from the other side. We as a Māori caucus made a clear decision this time, despite all the condemnation from the other side, to embark on a universal-type strategy. As Minister Jones knows—and I’ve said this before in the House—most of our Māori people don’t speak Māori. Most of them are not with Waipareira and the Manukau Urban Māori Authority (MUMA), sadly—sadly. Most of them are not attached to the Ngāpuhi rūnanga in the North. They’re just normal people who go about their business every day, in South Auckland, in west Auckland—

Hon Shane Jones: He tangata, he tangata.

Hon WILLIE JACKSON: —he tangata, he tangata—and in Porirua, and what did they need? They needed assistance—they needed assistance. With all respect, the foreshore and seabed, who owns the water—all the different kōrero that goes down about who owns what and what Māori need and what Māori want is irrelevant to your average Māori out there. They need good housing. They need good health plans. They need good education, and we’re a Māori caucus who have delivered on that.

Hon Dr Nick Smith: Why are you closing charter schools?

Hon WILLIE JACKSON: We have delivered on that. We don’t want to be worrying about 0.1 percent of the funding that National gave their ACT mates; we want to worry about the main population. That member, Nick Smith, over there knows that. National did absolutely nothing for people. They just threw the ACT member crumbs. They never really cared about Māori—whereas we care about Māori. So we embarked, Mr Smith, on a universal strategy that saw an accommodation supplement of $265 million go to Māori—$265 million went to Māori—$443 million went to whānau, whānau the National Party don’t care about; a winter energy payment of $274 million; and a Best Start payment of $250 million. But according to the other side, those sorts of numbers don’t count. They want to talk about nonsense; we want to get to our people.

We are absolutely rapt with the response from our people. We have people coming up to us in the streets thanking us for having a warm winter now. They’re sick of freezing and dying under the previous National Government. It’s terrible what our people have gone through. We have prioritised the things that are important and dear to our people. You can’t talk about the foreshore and seabed and other kaupapa like that—which are really important, might I add—while your people freezing and dying in cars. You can’t do that.

DEPUTY SPEAKER: I don’t try to do it. Don’t bring me into it.

Hon WILLIE JACKSON: You have to prioritise—my apologies, Madam Deputy Speaker. You have to prioritise—sorry, Madam Deputy Speaker, again. We have to prioritise what’s really dear to them. In saying that, this universal strategy has done well in getting to the majority of our people, and we are pleased particularly with Minister Robertson and his commitment to this. But we know that Māori organisations and groups are watching us, and we intend to deal with some of the requests that we have from Māori health providers, from Māori nurses, and from Whānau Ora groups—all of those groups remain a priority with this Government. They will form part of our strategy going forward, a universal strategy and a targeted funding strategy where we’ll get to all Māori. But in terms of this Budget, we celebrate it because our people are in a much better position and they’re in the right frame going forward. Kia ora koutou katoa.

ANDREW BAYLY (National—Hunua): Thank you, Madam Deputy Speaker. I sense that this is a Government in trouble. It is a Government in trouble, because I think the most alarming thing I read was the very first statement in the Reserve Bank’s Monetary Policy Statement that was issued last week. The very first statement stated, “GDP growth has slowed over the past year.” It goes on to say, “risks to the growth outlook are [on] the downside.”, and thirdly, it says, “Inflation remains below the 2 percent target mid-point, but there are early signs of inflationary pressure rising.” Those three things are what kill an economy, and that is why I think this Government is facing some pressures, even though it’s not prepared to admit to it yet.

I think the worst thing that the Reserve Bank identified on Thursday was that it had downgraded the GDP growth—this is the economic growth of the New Zealand economy—from 3.1 percent in the last year to September 2018. Through the four quarters to September 2019, we’re seeing a drop from over 3 percent to just over 2.5 percent. I said to this House not long ago—to the Minister of Finance, who happened to be sitting in his chair over there—that I believed that this economy would be generating only a 2.5 percent growth rate by the end of this year, and he laughed. The worst thing is the impact that has on New Zealanders trying to get a job, trying to save for a house, and trying to actually provide for their families. That’s the implication of a declining growth rate.

Also, the other thing that’s starting to bite is the issue around what’s happening with imports. As a result of what the Government is doing, the foreign exchange rate—the New Zealand dollar to US dollar rate—has fallen out of bed 2c over the last month—2c. It doesn’t sound like much, but, in percentage terms, it is very significant. The result of that is that all of our imports are substantially harder to buy. We’re spending more money to buy things like fuel, fuel, fuel. And that’s the issue.

On top of this, we have got a Labour - New Zealand First coalition Government imposing $2.6 billion of new taxes on New Zealanders, who didn’t know about it in the last election, but, somehow, these new taxes have been imposed. The worst one, in my view, in my electorate is the fuel tax—the fuel tax—because in my electorate there is very little opportunity to use public transport. I can guarantee there’s no opportunity to use the tram from the CBD to the airport. So what’s happened is the good people of my electorate of Hunua will be funding all this other expenditure in different places. That is why they’re going to be worse off. Their discretionary income is going to be diminished—not demolished yet, but diminished. I think that’s the worry for New Zealanders, and that’s the bit that really annoys me when I think about the impact on the good people of New Zealand.

It was interesting hearing the Minister, just before, talking about jobs—he is the Minister of Employment. Here we are: we’ve got a Provincial Growth Fund that sucked $3 billion out of the Budget, on top of the billion for the Rt Hon Winston Peters’ billion dollar “cushions and curtains for Stockholm”. So 4 billion bucks has been ripped out of the Budget, and, on the other side, what the Government has done is rip $5 billion out of rural roads—rural roads. If you’re talking about economic development, putting money into good infrastructure is one of the best things you can do.

When you look down in the south where I am in Auckland, taking the billion dollar Mill Road project off the agenda and trying to substitute it for Redoubt Road is, in my view, a very poor investment. Again, what we’ve got is a short-sighted slush fund being directed to things that are not going to generate jobs for people in New Zealand.

Dr DUNCAN WEBB (Labour—Christchurch Central): Tēnā koe, Te Mana Whakawā. Well, what have we got here? We’ve got an Opposition full of fear. It’s no wonder people want to know what’s going on when all we have from the other side of the House is scaremongering and doomsaying. You know what? What we have in this Budget is a new direction, a “New Hope”—it’s not the “Return of the Sith”. What we have are a whole lot of new initiatives to pick up the huge deficits and the decrepit economy that this Government was left with. What’s more, it’s a sustainable approach. It’s an approach which is looking at the long term. We’re not looking at the very next election, we’re not looking at your road for your constituents; we’re looking at building a New Zealand for all New Zealanders which is sustainable, which has wise investment, which will be here for years to come, and which recognises that we’ve got to change the way we do things.

We’re going to do it responsibly. We’re going to do it within the fiscal constraints that exist, within the fiscal constraints that we have recognised New Zealanders need so that they will have certainty looking forward—keeping our debt within constraints, having responsible spending. And you know what this is really about? This Budget is about the real hard-working New Zealanders, the New Zealanders who are working day in, day out—many of them in very low-paid work—doing work which is of critical importance. They’re not just our care workers, our teacher-aides, but also some of those people who are in professions that really aren’t being recognised well enough, and we’re working on that as well.

We’ve got to look at those people who work full-time jobs and still can’t make ends meet. That’s where we are looking. That’s why we raised the minimum wage. Let it be noted here that when that minimum wage was raised, there was no increase in unemployment—quite the opposite. Employment is high, participation rates are high, and employment is right at its sustainable level. Employment is higher than it has ever been, and we’re still creating more jobs for New Zealanders—for hard-working New Zealanders who need to get on. So we are focused on those people, not the high-income earners but those people at the bottom.

We need to lift wages. We are committed for every working New Zealander, over time, to get a living wage. It’s no good to have a minimum wage which is less than the living wage; we need a living wage for all New Zealanders, to give people the dignity and the mana in work, and that’s what we are aiming for. At the moment, we need to assist people. That’s why we increased Working for Families, which puts an average of $75 a week into families’ pockets, and a winter energy payment as well, because we know how tough it is out there for those working families. And you know what? Don’t be afraid of paying a fair wage. Don’t be afraid. Don’t be fearsome of having a fair employment arrangement.

The employment reforms that are on the books—the right of a union member to enter into a workplace has been there for years. All we are doing is removing the entirely unfair and inappropriate constraints on that. No, a union delegate should not have to ask for permission. Let’s recognise what unions do. They are advocates—advocates for workers who may not have a voice for themselves. So let a delegate enter a workplace and enter into a conversation, and let’s stop pretending it’s about conflict. It’s about cooperation. It’s about making that workplace better for employers and employees. We know that we could be more productive. The best way to have a productive economy is having workers and businesses working side by side for a common objective. That’s what this will do. This will enable a meaningful conversation and stop the suggestion that we are at loggerheads with employers and businesses—we are not. We want good businesses, just like everyone else does.

It’s simply not the case—it’s fatuous to suggest—that entry into the workplace is at any time and without constraints. Have a look at the Act—have a look. Already, in section 21 of the Employment Relations Act, entry has to be reasonable and within working hours. It has to be done in a reasonable way, on a normal business basis—through the front door—and expressly must comply with any health and safety requirements or any security requirements. So it’s simply inaccurate and it’s pernicious to suggest that this is someone swanning into a workplace to disrupt what’s going on there. What’s more, there’s an obligation to notify the employer that the visit’s happened and the purpose of the visit, so it’s highly constrained.

So, look, let’s get this economy more productive. That’s what this is all about. This is about smart growth, and to do that we need to work together, and that’s what’s going to happen. We’ve got a whole lot of other initiatives in this Budget, which is aimed absolutely at growing the economy, but not growing it in a false way, not growing it by adding more people to it or simply adding meaningless consumption, but adding genuine innovation—a green fund to say, “Look, if you’ve got a project which will both return a dividend and progress a carbon-free environment and economy, let’s hear about it. There’s money we want to spend on you.” I recommend every entity out there look closely at it, whether it be local government, whether it be entrepreneurs, or whether it be social enterprises. This is money that this Government wants to spend, because it’s going to be better for everyone.

The fantastic Provincial Growth Fund recognises that the provinces are a powerhouse of our economy but sometimes they’re left behind, and that we need to be putting resources in there to enable the people in the provinces to take their place at the top table of our economy and really get on and move it—whether it be through forestry, whether it be through improving ports, but improving our economic infrastructure in a meaningful way.

Research and development is somewhere where we have fallen behind. We don’t spend nearly enough on improving the way we do things, on thinking carefully, or on innovation. This Government has put $1 billion aside in tax incentives—$1 billion—for people who will invest up front in research and development, in those amazing people, the innovators of this world, who will also reap the benefits as they come to patent or copyright their inventions and what have you.

What’s more, we’re going to get infrastructure right. There is $10 billion of additional funding into infrastructure, but we’re not going to build meaningless roads that we have to tell everyone are of special significance. What we’re going to do is we’re going to address genuine infrastructure problems in an innovative way. What we need are safe roads, and I was horrified to hear the member for Hunua hollering again about his roads in his electorate. Rural roads are important and they do need upgrading. We need a genuine network. It’s not just about how fast you can drive from Ashburton to Christchurch; it’s about all around the country—north to south, from Bluff to Cape Reinga.

So, look, what we have here is a hopeful Budget—a Budget which gives us a new way of doing things, where everyone can participate in the economy and where we have an innovative approach. We’re supporting people to do things—a new way, a more productive way, and a way which includes all New Zealanders. I’m very proud to be part of a Government that’s doing it. Thank you, Madam Assistant Speaker.

TIM VAN DE MOLEN (National—Waikato): Thank you, Madam Assistant Speaker. It is interesting to see some of these discussions, and I just pick up on that most recent point from Dr Duncan Webb with regards to the roads—having absolute disregard for the value of the significant investment we’ve seen in the roading over the last stage of Government.

Hon Member: That’s right—“meaningless roads”.

TIM VAN DE MOLEN: “Meaningless roads”—meaningless roads—I encourage that member to get out to the regions to understand the value of that contribution. In my electorate, the Waikato has been a recipient, very gratefully, of significant investment in infrastructure in that regard, and so I would encourage that member, as I say, to look a little bit deeper and realise there is much more to the nationwide economy, the strength of what New Zealand has to offer, than his so-called meaningless roads.

In addition to that, we have seen this Government now shifting that focus away from the regions. Business confidence is slumping, and there is growing uncertainty within the provinces. Again, we see that in the rural towns. What we really need to see—if we’re looking to grow the economy, to encourage investment, to have prosperity, then we should be encouraging that through a much more collaborative, clear, direct message from this Government, and that’s clearly lacking. Investment is dripping away from the provinces. We see a $3 billion regional slush fund. We’ve no idea where that has been allocated at this point.

Andrew Falloon: Northland—Northland.

TIM VAN DE MOLEN: Northland’s getting some of it, and that’s great for them, but, actually, what’s the process around that? And then there are the trees. We still don’t know where that’s looking either. This lack of clarity is a significant concern and what’s underpinning a reduction in business confidence across the country.

As we’re seeing that business confidence slump, the Government continues to fail to provide any transparency around that funding and those allocations. As a result, businesses again are unsure where to go, what sort of investment they will make. They are some of the basics that we need to be considering. The Government get up and they say, “Hey, look, this is fantastic. We’re doing all these wonderful things, investing a few extra million here and a little bit over here.”—a lot into foreign aid, by the way, but not so much into health and education. But aside from that, what we are not seeing is ongoing support.

Dr Deborah Russell: Not so much into health and education?

TIM VAN DE MOLEN: The member across the Chamber seems surprised by that statement, and yet tomorrow we’re going to have teachers protesting in the streets because of lack of support and investment into their futures from this Government—a Government that campaigned long and hard on raising their incomes massively, and yet what is it now, now that they’ve actually ended up in Government, where they didn’t expect to be? They’re failing to deliver again, not just on the salaries of teachers but actually on a whole range of other aspects: the fees-free tertiary education, but even schools. They were going to wipe school donations. That was going to happen in the first Budget. Where is it? It’s a broken promise this Government has not delivered.

We have instead seen $2.8 billion towards tertiary education—and untargeted in that the first year of tertiary education’s where we already experience the highest number of dropouts in that education space. Why couldn’t they be more targeted? If for whatever reason they were determined—and obviously they were—to progress with such a path, it should have been the final year of study, to encourage people, to actually reward their hard work and determination. That’s what would have been seen from this side of the House: constant reward for hard work and determination. We’re not seeing it from this Government, and it’s no wonder now we’re seeing more people on benefits as a result of that as well.

The economy is struggling as a result of this Government. I’ve mentioned it already with the economy and the lack of confidence in businesses, and we are now facing uncertain times in the agriculture space as well. If we look at the changes in priorities there, we’re moving away from water storage projects—projects that were going to provide significant benefits into those regions, benefits that were economic, social, and environmental benefits. When you can help to regulate the minimum flows of those rivers, this provides huge environmental gains for those areas. On top of that, it’s additional jobs into our horticultural sectors, into our agriculture sectors, and yet this Government has just turned off the tap—no more water for those projects—

Hon Willie Jackson: Oh, sit down.

TIM VAN DE MOLEN: —and that’s disappointing to see. Mr Jackson pooh-poohs that. He clearly doesn’t care about the regions—not at all. Here’s a great opportunity for that Government to have demonstrated some support, and there’s no one on that side to stand up for the regions. Mr Jackson perhaps could get out of Auckland and go and see what else happens around the countryside. I welcome him down to the Waikato anytime he wants to see the impact of some of this Government’s decisions on the people at the coalface working day in, day out to provide the best they can for their families and yet not being supported.

Although, I suppose in the Waikato it could be a lot worse; we could be in Auckland and have a regional fuel tax to pay. We’ve seen that, again, the Auckland Council failed to actually meet their stated promises of reducing their costs, which would have negated the need for any regional fuel tax, and yet we’ve seen that implemented to bail out that council when they haven’t been able to meet their own standards. That fuel tax is hurting the people who are working the hardest. Those families on low incomes having to perhaps travel a bit further in a car that’s not as economical—they’re now facing significant more cost to do that. They’re not earning more, and that’s another reason why we’re seeing confidence around the country starting to waver. There’s a lot of uncertainty. What is this Government going to be doing? Those are the sorts of questions that people are asking. There’s no clarity, and ongoing question marks continue to be raised across a whole range of sectors.

Now, I touched briefly on the transport before, and that’s one I want to come back to as well. We heard Dr Webb pooh-poohing those investments into the roads of national significance—four-lane projects that have provided huge incentives and stimulus into the regions. They have a massive opportunity to provide connectivity within the regions, and that was the extent of what was being delivered, along with a whole range of safety benefits, reduced congestion, and better access within the communities that those roads connect. We’ve seen projects such as the extension of the Waikato Expressway from near Cambridge down to Piarere, in my electorate, and also across to the Kaimai Range. Those two projects would have been instrumental in helping to support the growth that we’re seeing in the wider Waikato region. What we’re seeing now is a focus on a couple of trams trundling up the line from Hamilton to Auckland, and then a few more back and forward in Auckland itself. Well, actually, that’s not going to fix the problem. The capacity that those transport options will provide is absolutely insignificant in terms of the greater issue, and we are seeing, unfortunately, a significant under-appreciation of where the challenges are from this Government.

This continues to be a broad-ranging issue that they’re facing across all sorts of portfolio areas. Quite frankly, it is disappointing when we sit on this side of the House and see that lack of initiative. Just look at the number of working groups that have been set up, for example. There are far too many out there, which clearly demonstrates there was a lack of work done in Opposition by the now Government in determining where their priorities would be. We have seen now all sorts of ad hoc policies being thrown out without actually understanding what the consequences of those are.

Hon Willie Jackson: Give us an example.

TIM VAN DE MOLEN: Oil and gas would be a great example of that—again, hurting the regions.

Hon Member: No thought given.

TIM VAN DE MOLEN: No thought whatsoever; no analysis, and yet we’re hearing from this Government they’re supporting the regions. Well, unfortunately, they’re not, and what they’re doing is, time after time, demonstrating a lack of support. They can talk all they like, but you cannot talk your way out of something you’ve acted your way into. That would be my message to Mr Jackson and his team. I’d encourage you to get out there, to understand what’s actually happening in rural New Zealand, and to provide an appropriate set of policies to support that.

That’s exactly what’s been happening on this side of the House. We have a very strong team that has been working long and hard throughout our relatively short time in Opposition to ensure that it is indeed short, and our leader has been driving that through a range of roadshows that have demonstrated a real connection with New Zealand. Up and down the length of the country, we’re understanding, we are listening to what is needed, and I would encourage this Government to do the same.

This Budget has been an absolute disappointment. Regional New Zealand—all of New Zealand—can and should feel let down by this, and it’s disappointing in the first effort from this Government.

MICHAEL WOOD (Labour—Mt Roskill): That speech had all of the dynamism and energy of a lobotomised sloth and it was still one of the best contributions from the Opposition benches. It took that member, Tim van de Molen, nine minutes and 30 seconds to get the obligatory mention of support for his leader in there, but that’s better than many of his colleagues have done. That’s a bit of a warning sign, speaking from some experience—I’ll let the members of the Opposition know that.

I want to move not to talking about the past, as that member spent most of his speech on doing, but to talking about this Budget and its vision for the future of building the foundations for a better and a fairer New Zealand. I want to start off by talking about a small meeting that was held in my electorate office at 4 o’clock on Sunday afternoon.

Simeon Brown: The member only has small meetings.

MICHAEL WOOD: That member may have been lying on the couch at 4 o’clock on Sunday afternoon, but this member was hard at work in his constituency. That meeting was a gathering of local residents who are volunteering their time to take part in Auckland’s Homeless Count. What’s happening in September in Auckland is, in response to the housing crisis, Housing First and other organisations who are deeply concerned about homelessness in New Zealand’s biggest city are getting together to actually count the number of people that we have sleeping in cars and sleeping on park benches in our city. If nothing else speaks to the legacy of neglect that this Government inherited and the challenge that we faced in that Budget, it is the very fact that in our biggest city we have thousands of our fellow New Zealanders—men, women, and children, who do not—

Hon Scott Simpson: There are more sleeping on park benches.

MICHAEL WOOD: Men, women, and children are sleeping in cars and on park benches, and that member, the member for Coromandel, can belittle that if he wants to, but I invite him to join me and others on 20 September on Auckland’s Homeless Count to see with his own eyes the legacy of his Government, because that is what happened under that Government and their failure to do anything about that issue as the problem grew, and grew, and grew. That previous Government put their heads in the sand, and they still continue to do it. They cannot utter the words. They cannot even accept that there is a housing crisis. It is denial and deflection, even when the problem is staring us in the face.

So that’s where we’re at. This Budget is about laying the foundations to make sure that every Kiwi family can have a decent, safe, secure, healthy, and stable place to live. One of my favourite thinkers and theologians, Jim Wallis, tells us that Budgets are a moral document. Budgets are moral documents, because they go beyond what you’re saying: where you put the money actually tells you where your priorities are. One of this Government’s top priorities, as expressed through this Budget, is that fundamental right.

Simeon Brown: Tell us about school donations, Mr Wood.

MICHAEL WOOD: The member can speak and disagree with this, the member for Pakuranga, if he wishes, but this Government believes that it is a fundamental moral duty to ensure that every Kiwi family has a decent, safe, and warm place to live. That member may just like to reflect a little bit on the way in which his party got into such grief last year because of their failure to recognise that problem—but there is no learning whatsoever.

So what do we see in this Budget and these appropriations? We see a range of very, very serious measures. We see 1,400 new emergency places funded. We shouldn’t be having to fund 1,400 emergency places. We’re having to fund them because of the crisis—because there are not enough houses for people. It is a legacy of that previous Government’s neglect that by the end of their term in office, as the housing crisis mounted, we had 1,500 fewer public houses than we did at the beginning of their term. As people were living on their streets, as people like Keith Johnson died on a park bench in Onehunga last winter, they were busy selling off public houses. That is the legacy, and that is what this Budget begins to overturn.

So we have the 1,400 emergency houses funded—that’s a crisis response to that situation. But we’re about doing more than just managing the crisis, which is the most that that lot ever got up to. We’re actually about providing decent and sustainable housing. So one of the things that I am most proud of is the investment in 6,400 new warm, modern State houses for our families who so desperately need them. Not only have we stopped that shameful sell-off of public housing, we’re investing in modern State housing for those families who need it, and in electorates up and down the country there are families who are going to be so much better off for that.

Through this Budget, we’re investing in building 100,000 affordable starter homes for Kiwis who have been locked out of owning their own home under that housing crisis. That’s the policy: building those affordable starter homes under KiwiBuild for young couples, particularly those living in Auckland, where the average house price spiked to nearly $1 million under that previous Government’s watch, bringing homeownership rates down to the lowest rate since the early 1950s.

One thing that I will say about the National Party throughout most of its history—most of its history, perhaps until the last 10 years or so—is that the legacy of “Kiwi Keith” Holyoake was they did have a vision and they did have a belief in New Zealand as a property-owning democracy. Along with the Labour Party, over successive Governments from the 1950s through to relatively recently, there was a belief—there was a belief and there were policies to support the belief—that people who worked hard, people who saved a bit, people in decent, middle-income jobs should be able to afford a place of their own. But that has just slipped out of the grasp of so many New Zealanders, so I am so proud that in this Budget we are rebuilding the foundations of that dream of a young Kiwi couple being able to afford their own home through KiwiBuild. We are so proud that those first homes are going to be coming on stream this year—1,000 built in this first year. That’s going to make a huge difference.

We’re rebuilding the foundations of justice and decency and dignity for our working families. It shouldn’t be the case that 40 percent of the children living in poverty in this country are living in working households. How is it that people can go to work in this country and not earn enough to escape the clutches of poverty, to not have kids growing up in material hardship, lacking the things that they really need to do to be able to thrive in our community and reach their full potential?

That is why I am so proud of the Families Package that came in during the mini-Budget late last year and carries through in Budget 2018. It is going to ensure that 380,000 of our families are $75 per week better off. That is going to make such a difference to those people who are battling away—hard-working people who try and do the right thing but have just been struggling, struggling, struggling for nine years to keep their heads above water. That is going to make a huge difference to those families.

I’m proud of the cheaper doctor’s visits which come through, because one of the things that I hear from my constituents is that some of those people are just sort of keeping their heads above water in an ordinary week, but when a problem hits—when the car breaks down or when someone gets sick and those unexpected extra costs come in—that is when it gets difficult; that’s when people get into debt and problems. So that’s going to make a big difference.

One of the additional measures I’m incredibly proud of, and I know has made a huge difference over the last couple of months, has been the winter energy payment. It’s a great coalition Government policy that speaks to the values that all three parties bring into this Government, about ensuring that none of our older folks and none of our lower-income people who are on main benefits have to go cold over winter. It’s been estimated that around about 40,000 additional hospitalisations occur every year in this country because people haven’t been able to keep warm in their own homes over the cold winter months. That is not right and it is not necessary in this country, and that winter energy payment is going to make such a difference to those families.

That’s been made possible—going back to this point about a Budget being a moral document—because this Government made different choices. We chose not to give members of this House a tidy little tax cut; we chose to ensure that people had the winter energy payment and our families had the benefit of that Families Package, because it’s those lower- and middle-income, battling families who need the support of this Parliament. That has been the priority of this Government in Budget 2018.

This has been a Budget which has been about looking forward, looking after those issues that we face today, but also looking ahead for New Zealand. I am so proud of the fact, for example, that after nine years of failing to pay into it, this Government restarted payments into the New Zealand Superannuation Fund. We’re not just concerned with the political circumstances now and trying to make the books look good so we can present them at the next election; we’re concerned with the fact that every single New Zealander should have the security of New Zealand superannuation now and into future generations. Restarting those payments is going to make that possible.

This is a Budget which has been about rebuilding the economic, social, and infrastructure foundations of New Zealand. They were badly neglected over the last nine years and there’s a heck of a lot more work to do. We can’t do it all in one Budget, but this Budget has made an incredible start. It’s making a difference for New Zealanders and it is helping to make this a better and a fairer place for all of our people. I very much commend it to the House. Thank you, Madam Deputy Speaker.

Hon NIKKI KAYE (National—Auckland Central): What a statement from the honourable member Michael Wood: that this Budget is about a fairer New Zealand. Well, let’s walk through that, actually. What is fairer about $2 billion extra in taxes when your party campaigned on no new taxes? What is fairer about having inherited a situation, from an economic perspective, where 10,000 jobs were being created a month, to see that slashed to 4,000 jobs and business confidence tanking? What is fairer about half a million businesses in New Zealand facing an extraordinary situation—after the National Government left an economy that was doing well: jobs were being created, lower taxes, less regulation—that sees those businesses staring down the barrel of an uncertain environment in terms of foreign investment, a difficult environment in terms of industrial relations. And it’s not just a difficult environment; people are saying it’s worse than the 1970s—increased costs in terms of petrol taxes, and increased costs in terms of minimum wage?

We all agree on raising the minimum wage. National did it every year that we were in office, but if you do it at a pace that is so fast, we see jobs lost. The 90-day trial was scrapped for businesses with employees over 20. What is fairer about that country that sees our economy now stalling? What is fairer, honourable members in the House, about the average middle New Zealand family being $2,500 worse off, in our estimates, as a result of this Budget? They don’t get universally cheaper doctor’s visits. There were a lot of broken promises from Labour, where they raised massive expectations in the campaign, and the reality is they have not delivered them in areas like education and health. They have also then gone and put on these taxes, borrowed more, and the reality is there is nothing fairer about $2,500 additional for New Zealand middle-income families.

The thing that I would say to members opposite—and I would also say this to the Prime Minister, is for a party that claimed to be one that cares about equity and aspiration and enabling young people and all New Zealanders to get ahead to be delivering a scenario whereby business confidence is tanking—actually, take the area of education, where there are more than 18 broken promises. We have a scenario where the Minister of Education goes on national television and says that donations are going to be scrapped within the first Budget—doesn’t deliver that. We have a scenario where, tomorrow, teachers will strike. And we all accept that we dealt with very difficult situations, including the global financial recession and the Canterbury earthquakes, but to have a scenario where $2.8 billion was doled out to students instead of teachers is not a fairer New Zealand.

Ultimately, this was a Government that had huge opportunity handed on a plate, and what they have done is they have squandered that opportunity. It is not necessarily the members of this House that will feel that; it is the mums and dads who go to work every day that will be paying higher taxes. They will see their mortgage rates potentially going up because this Government is spending more and they are wasting more money, and because we have a situation where businesses aren’t confident to employ people.

Take the area of education—a situation where there was an opportunity to pay teachers more. There is an opportunity to do more in this area. They have bad priorities, and to dole out what is equivalent to nearly a 15 percent increase for every teacher in New Zealand to all of the students instead is extraordinary.

That’s why, on this side of the House, we do not agree with this Budget. We do not think that this is a Budget for middle New Zealand. We do not think that this is a fairer Budget. We think this is the Budget of squandered opportunities. What do we believe in? Well, we do believe that, actually, you get to be able to fund your public services, in areas like education and health, when you support those small businesses to get ahead. It is those businesses that create the jobs and that earn the income. When you support trade and when you support them, ultimately we get additional tax revenue for the Crown and we’re able to have choices to spend more on public services.

The extraordinary situation is that we have a Government that has taken these brilliant and beautiful opportunities and squandered them through bad spending priorities—not all, and I would say I think learning support is a great area, and it’s good that we saw that in the Budget. We’ve seen a bad set of priorities; we’ve seen a whole lot of broken promises—again, hence why we also have the teacher strikes tomorrow, because from their perspective, and I’ve talked to a number of teachers and principals out there, there was this massive expectation raised and there hasn’t been the delivery, in terms of this Budget, around education.

In fact, one little fact for you is that in this Budget, we’ve seen the compulsory sector share of the Vote go from 13.2 percent to 12.8 percent. So at a time when the Labour Party campaigned on caring about teachers and our primary and secondary school system, they’ve actually managed to shrink that share of the Vote. Why is that? It is because they have New Zealand First tugging on their reins in terms of some of those spending priorities. We’ve seen hundreds of millions of dollars in this Budget given to diplomats rather than to teachers. We’ve seen a situation in this Budget where some of that slush fund that the Hon Shane Jones has is, again, being given to New Zealand First members to keep this Government and hold it together, rather than to deliver on scrapping school donations, as they promised, or potentially many of the other education promises.

I mean, for instance, we heard over the last couple of weeks that Ginny Andersen went out there and campaigned on lower teacher ratios and smaller class sizes. We know that that is very unlikely to be delivered because the Government can’t even deliver 18 of its education promises, and that is because—and I hesitate to use this language in this House, and I will be very careful and I hope that Madam Assistant Speaker won’t pull me up—the gap between what they’ve promised people was very, very misleading. I’m not going to say “dishonest”—I’m not going to say that they were dishonest. I am not saying that.

But I am saying that when members go out to the public and say “We’re going to promise billions and billions of dollars in health and education spending, but because it’s not in the Speech from the Throne, it now maybe doesn’t exist.” at a time when they have more than 20 percent more cash than we had, this is the extraordinary thing. They have more than 20 percent more cash than the last National Government had, yet they’ve not delivered on about 18 education promises.

They’re taxing us more and they borrowing more, and this is the extraordinary thing. As I have said at the outset to members, this is a situation where this Budget is squandered opportunities for our country. At a time when National did the hard yards with a whole lot of other New Zealanders to lift us out from a decade of deficits and we did the best that we could with the envelope of cash that we had, they got given the greatest opportunity ever, and they’ve managed to mess it up. Thank you.

Dr DEBORAH RUSSELL (Labour—New Lynn): I am proud to be part of the Labour - New Zealand First - Green supported coalition Government. I am proud to be part of this Government that cares. I am proud to be part of this Government that has delivered this Budget—this Budget that is about recovering, this Budget that is about restoring, and this Budget that is about regrowing. This Budget is about rebuilding and putting our economy back in a better place, after nine long years of neglect and after nine long years of the winner-takes-all mentality.

The previous speaker, Nikki Kaye, talked about doing the hard yards. Well, I tell the previous speaker and I tell this House who was doing the hard yards: it was the children sleeping in cars, it was the people dying on park benches, it was the families living in cold, damp, mouldy homes, and it was the people whose incomes were being stretched and stretched so that they were going into food banks, begging, to get by week to week. That’s who was doing the hard yards.

I can tell you where that idea that you might be doing the hard yards comes from. You see, the party on the other side of this House, they believe that the market will fix it—that somehow, by the great magic of the market mechanisms, everybody will be OK. Well, I tell you that the market does supply solutions. The market does come up with results. The market supplies a market solution. It’s just a shame about the people who get left out. On this side of the House, we care about the people, and that’s why we have delivered this Budget—this Budget that is about caring for New Zealanders.

Let me just talk about some of the things that we have done in this Budget that actually matter. First up, we have put $3.2 billion into health—$3.2 billion. We’ve used some of that money to make sure that our nurses are properly paid. We’ve used some of that money to make sure that our wards are properly staffed. We are using that money to ensure that New Zealanders can access decent healthcare. We’ve put $750 million into capital budgets in the health system—no more mouldy walls in hospitals. The neglect of Middlemore Hospital was absolutely shameful, especially a hospital that serves one of the poorest communities in our nation. The other side of the House ought to be ashamed of what happened there on their watch.

Then, in terms of education, we have increased the operational grant to schools by 50 percent. There are 1,500 more teachers coming on our watch. We have doubled the pay offer to teachers—doubled what the previous National Government ever offered to teachers.

The other side of the House has been complaining about teachers going out on strike and about nurses going out on strike. They are saying, “Why, why, why are they doing it under a Labour Government?” I’ll tell you why—because the National Government had them tied down so hard and made it so hard for them to press their claims that at last, with a Labour Government, they can press their claims. You know, it’s hard managing strikes in the public sector, but we are negotiating in good faith, first of all, with nurses and, now, with teachers because we do want to ensure that our children and the people in our health system have access to professional staff and that they are well served. So we are entering into those negotiations in good faith.

The previous speaker also worried about our fees-free policy for tertiary students. There were a couple of complaints. One was that we’re doing it at all, and the second was that we should have done it for third-year students, not first-year students. Well, that second reason is very easily dealt with. It’s not just a policy for university students who do three-year qualifications. It is a policy aimed at any post-school education: polytechnic education, trades education, apprenticeships, and university education—not just university education.

When it comes to that fees-free policy, it wasn’t just about increasing enrolments. You know, students come out of our universities and out of our polytechnics with huge student loans. It creates a real burden for them. The reason for this fees-free policy is to ensure that we decrease the burden on our young people and that we commit to the value of a free education, so that every member of our society has the opportunity to access a decent level of education—the education that is required to have a thriving, democratic nation. That’s why we went for fees-free.

But let me focus specifically on housing. There was a crisis in housing. There still is a crisis in housing—it isn’t going to go away in one Budget. I have yet to hear a single member of the Opposition ever admit that there might have been a problem in housing. All we got was futile running around in Crown cars, looking at cemeteries as possible places to build houses—that was their sole effort in terms of housing. They simply closed their minds to it. They closed their minds to the families sleeping in cars. They closed their minds to the cold, damp homes. They closed their minds to the outrageous price of houses that shut young people out of the housing market.

We are taking action right across the housing portfolio, across the whole range—right from the people who need emergency housing through to people who are trying to buy a house. Let me talk this House through the actions that this Government is taking. In emergency housing, we are providing 1,400 more emergency places. You know, we shouldn’t have to provide emergency housing, but we are because we want to make sure that people at least have a secure place to lay their heads at night. So we are funding the Housing First programme. That’s a fascinating programme. The idea is that you sort out people’s housing and then you help them to work on all the other issues. So, first of all, get them into a house, and then it’s possible to help someone to work on, perhaps, addiction issues, to work on, perhaps, mental health issues, and to get them the assistance they need. Sort the housing first and then the other stuff. It’s a really good programme.

We are building more State homes. The previous Government in the midst of a housing crisis sold State homes. We are building them. We have an enormous commitment to ensuring that New Zealanders have secure housing. We are taking action with respect to the outrageous housing market, where we propped up the economy by flipping houses on to each other. Those of us who had housing sold it to each other, and somehow we thought this was success. So we have expanded the brightline test from two years to five years to slow down that outrageous rate of turnover in the housing market, and we are bringing in restrictions on who may buy homes in New Zealand. You know, if someone is coming to live here in New Zealand, fantastic—you’re welcome to buy a home here. But no more non-citizen, non-resident, overseas owners of our homes—homes for people who are living in and are committed to New Zealand.

None of these actions, perhaps, would have mattered by themselves, but taken together as a suite of actions across the housing market, they are designed to ensure that New Zealanders have secure homes, and secure homes matter. A person who is secure in their our own home, a person who knows where they will sleep that night, a person who is part and parcel of a neighbourhood and a community—that’s when that person can flourish. That’s when someone can coach their child’s sports team. It’s when their child can stay at the same school. It’s when they can get a job—because they have secure housing. Secure housing is not a reward for having a job; it’s the other way around. The first thing is secure housing for a person, and then we can help secure the structure of their lives so that that person can be a thriving part of New Zealand.

If nothing else, I hope that this Labour Government will be remembered for its commitment to housing, it’s commitment to ensuring that New Zealanders have a home, because that way we have a successful and thriving society.

Rt Hon DAVID CARTER (National): Madam Assistant Speaker, it is absolutely a pleasure for me to take a call in this three-hour debate, the third reading of the Appropriation (2018/19 Estimates) Bill. But first of all, I want to accept the challenge that’s just been issued by Dr Deborah Russell when she said she has not yet heard any member of the Opposition acknowledge there’s a crisis in housing. And I want to say today I do acknowledge there is a crisis in housing, and that crisis goes by the name of the Hon Phil Twyford. We watch him day after day. First of all, I admit, there’s not a lot of level of confidence for any of the Ministers on the other side, but to watch the Hon Phil Twyford stand day after day and attempt to justify his KiwiBuild programme, which I’m reliably informed is 100,000 houses over the next 10 years, which equals 10,000 houses each year, and we’re nine months through the first year—and the last time I recall the Hon Phil Twyford putting a tally on how his KiwiBuild was going, I think it was one-eighth—18 houses. So, Dr Deborah Russell, there is a crisis in housing, and that crisis is the Hon Phil Twyford.

I’ve had the pleasure of listening to most of this debate in the House this afternoon, and what intrigues me about the debate is there’s clearly two perceptions as to how successful the Budget was. One is the Minister of Finance and “Professor” Tabuteau and Michael Wood and Dr Deborah Russell saying there’s nothing wrong with the economy. We had the Labour member for Christchurch Central come into the House in the debate and say that the current Labour - New Zealand First - Green Government inherited, and I quote, “a decrepit economy”. Well, let me remind Dr Duncan Webb that this Labour - New Zealand First - Green Government inherited one of the strongest economies in the OECD. Not performing so well now, but it was one of the strongest economies in the OECD, and, if you want to compare it with any country at that time, look how it was outperforming our nearest large neighbour, Australia. And now they are outgunning us successfully.

Jamie Strange: What was the economy based on?

Rt Hon DAVID CARTER: And Jamie Strange interjects and says, “What was the economy based on?” Let me tell him. It was based on sound economic policies.

What we’ve seen is the politicians on the Government side arguing everything’s fine, and, as I’ve listened to the Opposition members, they’ve pointed out that things aren’t quite right with this economy. I say to Jamie Strange, who’s a new member and not renowned for his economic credibility: listen to the business people. Listen to the people who are out there trying to make the economy work, because what that member will learn, if he survives the next election—and that’s doubtful, but on the assumption that he does, what he’ll learn—is that governments don’t make the economy go round; it’s business that makes the economy go round.

If he wants further proof of where this economy is going, have a look at the latest figures from Treasury. The apolitical Public Service, that the Prime Minister announced yesterday was now eligible for another award—that was the big announcement post Cabinet. The apolitical Treasury has revised down the growth figures for the New Zealand economy. Adrian Orr, the Governor of the Reserve Bank, came before the Finance and Expenditure Committee last Thursday, and I quote for Jamie Strange—who’s now gone quiet and hangs his head in shame—let me just repeat what Adrian Orr said, chapter 3, page 13—

Jamie Strange: Teach us.

Rt Hon DAVID CARTER: Listen to this, Mr Strange: “GDP growth slowed in … March 2018 quarter. We expect recent weakness in growth to persist in the near term.” So you’ve got business lacking confidence. You’ve got the Reserve Bank saying that growth figures have changed and turned down, and you’ve got Treasury saying growth figures have turned back down, and the Labour Government refuses to accept it. I say, there’s a looming crisis for this economy, and I don’t make that prediction lightly. Let me take you through a few reasons why.

The first one’s debt. I remember the last campaign—I wasn’t actively campaigning, but I remember it well—and the then National Minister of Finance came out and talked about a fiscal hole of $11.7 billion. Everybody, mostly pushed by the media, said he was wrong, wrong, wrong, and no economist would back him. Yet we’ve recently had the revelation that $6 billion of debt was hidden—hidden, and I use that word in the kindest way I possibly can—by the Minister of Finance, the Hon Grant Robertson, transferred into the books of the New Zealand Transport Agency and Housing New Zealand. And then you’ve got respected economist Cameron Bagrie coming out and saying, “I think I got it wrong.” He’s honest, this man. He thinks he got it wrong, and he thinks we’ve got a looming fiscal hole of probably in excess of $11.7 billion. Is it any wonder that business confidence is declining?

The next problem you’ve got is the quality of expenditure. Take the free fees for tertiary students for the first year. Let me tell you, as a dad of two students who aren’t in their first year, they’re pretty annoyed about that. Why should one particular small echelon of those attending university get free fees? But the more important thing is that there’s been no increase in students enrolled in tertiary education. In fact, there’re 900 less students enrolled than there was. So that $2.8 billion expenditure is questionable, in my mind.

And then I turn to the $3 billion slush fund called the Provincial Growth Fund. But all members in this House know it’s nothing more than a slush fund, and to listen to the Hon Shane Jones question time after question time attempting to justify some of the projects he’s spending his money on—50 percent of it so far in one province alone, called Northland. We all know it’s a slush fund, and I think taxpayers, who are working hard day after day after day and paying their taxes, deserve to know that their taxes are being well spent, and that is not happening with that Provincial Growth Fund, or slush fund. So who’s winning in this Budget? Who’s really in charge of this economy and this Government? It’s the Rt Hon Winston Peters. Who got the big expenditure items? It wasn’t the Labour caucus; they got rolled. Three billion dollars in a slush fund, another billion dollars to diplomats and for foreign aid in the Pacific Islands—all questionable expenditure.

I want to conclude now briefly on why business confidence continues to fall and will continue to fall. It’s all around industrial relations. And what we saw today in the House during question time is that the Prime Minister hasn’t got a grip on what the proposed legislation is going to be. We’ve got teachers on strike tomorrow. We had nurses on strike recently. The nurses got double-digit pay increases. Education support workers, apparently, today have received a 30 percent wage rise—probably some of that is well justified, I suspect. But what you’re going to see is the public sector pay increases continue because the Labour Government, during their campaign, overpromised. And that’s only going to continue to add to the lack of business confidence, and when businesses lack confidence—and Jamie Strange should listen to this—they stop increasing employment opportunities. And that’s the next thing that I predict you’ll see: a rise in unemployment. And, again, you can disguise it any which way you want—work for the dole, which you don’t believe in, and which the Government’s recently brought in—but if businesses lose confidence and stop employing, then this economy will continue to grind, grind, grind. And there’s a plus for that: it makes it easier for the National Opposition—

ASSISTANT SPEAKER (Poto Williams): Order! I apologise to the member, but your time has expired.

MARAMA DAVIDSON (Co-Leader—Green): So I’ve ended up with some minutes to have a good ramble in, and ramble I will.

Rt Hon David Carter: You always do.

MARAMA DAVIDSON: I know. It’s a part I love about my job—the member was just saying. We’ve actually been doing it all wrong, to be honest, and the world is starting to know this. The world is starting to realise that we have actually been doing economy wrong. What we have been doing is we have been taking into account a narrow definition of what the economy actually is, and we have been measuring using narrow indicators to measure well-being in terms of how well our country is doing economically. The world is understanding this. Aotearoa is definitely understanding this. And what I wanted to do, in this time, was talk about some of the indicators where some of the Budget announcements and estimations are going to put us on track as we start to realise what the people are saying: that we have been doing the economy wrong. We need to be extending our well-being indicators for how we say, “How are we going? How are we doing? How are people? How are communities? How is our environment?” And, therefore, really, “How is our economy?”

So what we ended up with over many decades, and actually generations, is a narrow “economic success” definition that talked about GDP, that talked about balance sheets, and that talked about fiscal measurements, all the while housing was going down the toilet and our environmental degradation was going down the toilet. We are losing species and indigenous species at a rate that should be alarming all of us. We are having people and families in our country in living situations that should not be acceptable in this country. We are having workers and low-income paid workers who are in dire financial situations where that should not be happening in our country. We have a health crisis with our hospitals where that should not be happening in our country. We have key workers in our communities who can’t afford to live in our communities. That should not be happening in our country. So I am pleased with the direction that the Estimates has started to track us on to. Absolutely.

We can just take as an indication the huge boost in funding—$181 million—in conservation to target predators, restore our native ecosystems, and support conservation activities. We can take that huge boost, also, as an indication of the neglect over the entire nine years of the previous Government and a narrow attitude that looking after our environment was not a core part of our economy. So we absolutely need to understand why that massive injection of funding was necessary. We have to transform how we think our country is doing when it comes to the economy.

We can no longer operate in a vacuum and with an isolationist understanding that says, “As long as we are making those massive surpluses, and that GDP hit, whether our kauri trees are dying around us, whether there are people living under bridges and in cars and in boarding houses, whether people are having to move seven times a year because they cannot find secure, affordable, healthy homes”—we will no longer separate those issues out from how well our country is doing. So I was pleased to see the signs in this Budget that put up a flag to say we don’t accept that definition any more. We understand that our country and people around the world are saying that it is no longer good enough. It led us down the wrong path.

I was, of course, celebrating Minister Twyford’s budget investing $2 billion into getting affordable starter homes built, because, at the moment, our country has been saying, “Only a few with wealth can afford to own a home and put down roots in your community. Only the wealthy and privileged few can own quite a few homes, actually—many homes—while over 50 percent of the country is still renting.” and that number is growing higher and higher. So we are sending a different message. We are saying that that is no longer good enough. We cannot shout from the rooftops about a good economy while all of that is happening around us. More importantly, we are sending a message about what this country needs to value and where we are going to put our money behind our talk. That is the important message that was coming through in the indications and some of the Estimates that have come through. The Greens are very clear, in fact, as are our colleagues, that this is just the start. This is not the end of where we mean to get to. This is the start of saying “We don’t accept that definition of economic success anymore.”

I think the previous speaker, David Carter, mentioned how the previous policies were built on sound economic review. That’s not good enough any more, and everybody knows it. We know that you can’t get away with it any more. And I’m celebrating that. I’m so proud of Minister Shaw’s launch of the work on well-being indicators. That is transformational stuff. That is going to set our economy and the way we think of well-being in this country in a direction that will take us into the future—into a sustainable future—where we understand that our economic, environmental, and social outcomes are all connected; that cannot look at any one of those in a vacuum. That is what the various Estimates, the various initiatives in this Government’s first Budget signalled. We will say, from this point, that housing is a human right. We will say, from this point, that ensuring people are in good, warm, affordable, secure homes is crucial to our economic well-being. Ensuring that our biodiversity, our ecological species, and our native species—many of whom we are losing at an alarming rate and are threatened at an alarming rate—are core to our economic well-being.

I am very pleased to be able to stand on this side of the House and support the fact that we are making a start on mental health with funding for youth services and putting more nurses into more schools. I am very pleased to be able to say that this side understands the importance of mental health in our young people and in our communities and the importance of providing those services as core to the overall sustainable well-being of our country. I am very pleased to be part of the side of the House that understands where we need to go to stop ourselves from heading down a dark path that we were on, including from the nine years of the narrow economic well-being definition that the previous Government tried to hold up for so long.

That’s falling down around their ears now, and they know it—they know it. They know that they can’t harp on about that while there is mould in hospitals. They know that they can’t harp on about that while teachers, nurses, police, and firefighters are struggling to pay the rent in the communities that they live in. They know they can’t get away with that any more, and I’m very happy to be on the side of the House that understands that. Thank you.

Hon MARK MITCHELL (National—Rodney): Well, I’m very pleased that the—

Hon Grant Robertson: This will make up for not getting those questions.

Hon MARK MITCHELL: Sorry, what was that from the Minister of Finance?

Hon Grant Robertson: This will make up for not getting any questions.

Hon MARK MITCHELL: I’m very pleased to see that the last speaker, Marama Davidson, who is now part of the new coalition Government, is in a position to change all those things and take some positive action on it. We’re almost 12 months into this new Government, and we haven’t seen a lot of things actually happen or occur.

It’s a great privilege to take a call on this, the Appropriation (2018/19 Estimates) Bill at the third reading, and I’m going to talk about three areas. The first is defence, the second is justice, and I’m also actually going to talk a little bit about how this Budget related and has had an impact directly on my own electorate of Rodney.

So on defence: the Limited Service Volunteers (LSV). The LSV announcement was a very good one. The Limited Service Volunteers programme—a programme that I’ve been a huge supporter of myself—

Hon Willie Jackson: I was a patron.

Hon MARK MITCHELL: A patron? Me too, so well done. I think we would acknowledge across the House that it is an excellent programme that’s delivered outstanding results for young people. I want to acknowledge the members of the defence forces that work in that programme, social development, and also the police—they have police mentors involved in it as well.

So I was very pleased to see that the Minister of Defence went to Whenuapai recently and turned the first sod on the new facility that was approved through the National Government, because we obviously saw the importance and were making a very big investment, a big capital investment, into supporting that programme. I was very pleased to see also that there was an announcement made around expanding the LSV programme, but I was disappointed to see that the funding required to actually expand the programme has not been allocated.

So I’d be very keen for someone on the Government benches to take a call and explain why the funding hasn’t been allocated and when it’s actually going to come online, because at the moment within LSV they’re finding it very difficult to actually implement the wish of an expansion without the funding to back it up and make it happen. So that was very disappointing to see in this Budget, and I’d be very happy for someone to take a call on the Government benches and explain why that has happened.

The P-8A Poseidons—what a great decision. The finance Minister, the Hon Grant Robertson, is in the House. Well done. Good decision on funding and purchasing those P-8A Poseidons. I had to listen to the defence Minister stand and tell us all about how we’d kicked the can down the road and hadn’t made the decision and it was his decision and puff his chest out and sort of thump his chest a bit like the little Napoleon and all the rest of it. But the fact of the matter is this: I was very pleased to get feedback from our coalition partners to say, “We recognise that actually the heavy lifting and all the work that was done to make the P-8A Poseidons a viable option for the incoming Government was done by the previous Government.” And if anyone wants to stand and take a call and refute that, then I would welcome you to do that.

Hon Grant Robertson: Heavy lifting! You and I have got quite a different definition of heavy lifting.

Hon MARK MITCHELL: That’s the feedback that we got from—look, maybe you want to get at the gym with “Nashy”, and push some barbells around with him. The phone just looks a little too heavy.

So I was very pleased to get that feedback and see that they’d acknowledged that actually we had put a lot of hard work in.

I want to acknowledge the staff at the Ministry of Defence that actually worked very hard, particularly with their counterparts in the States, to put that deal together and make sure that it happened. It’s very important. It means that we’ve closed the capability gap, and we’ve got interoperability with our partners, and they’re going to be a great aircraft for us into the future.

Deployments: it would be nice to see some decisions around deployments, because I noticed that in this Budget there’s been no provision made for the ongoing deployments of our troops in the Sinai, in Afghanistan, or in Iraq.

Hon Grant Robertson: The contingency that you guys put in. It’s still there.

Hon MARK MITCHELL: It’s the contingency is it? I just wonder why the decisions are being pushed off until November. I think that in the Sinai, we’ve had a long commitment up there—a very important one in terms of a UN-led mission that is definitely, without a doubt, making a major contribution to maintaining stability and peace in the region.

The second deployment: the deployment to Iraq—this is a critically important one. Not only am I very proud of what our troops have been doing up there for the last 2½ years—they’ve trained over 30,000 Iraqi combat troops, who have been fighting on the front line against the Islamic State of Iraq and Syria (ISIS) and who take on enormous risk and suffer huge losses. Their increasing capability—actually, the important work around rules of engagement that our troops have delivered up there to these front-line troops has been enormous, and I want to acknowledge them, the work, and the contribution that they’ve made overall with our coalition partners and the Iraqis in actually really taking this fight to ISIS. And, really, now they’re in a bit of a mop up stage in terms of heading down through the Euphrates River Valley.

But the most important part of that deployment is yet to come, and that is the stabilisation. If you look at our history over the last 20 or 30 years with the West and deployments and these coalitions, it’s that we go in, we do some very good work, we can remove the threat, but then we move—this is my view: we leave too early. We actually need to stay, and we need to remain committed to the stabilisation. And this is what’s going to be critically important now. We’ve got an important role to play in that, and it’s also very important that we stay united with our historic partners and we remain committed and have the intestinal fortitude to stay there and help Iraq stabilise and not allow that vacuum to reappear where groups like ISIS will very quickly fill the vacuum and will see the problem—a global problem—emerge again very quickly. So I’d like to see the current Government take a call and just give us an indication and say, “Actually, we recognise the importance of this and we’re going to recommit to leaving our troops up there in support.”, especially in Iraq over stabilisation.

Justice—the disappointing thing about the budget for justice was this: the biggest increase in allocation was about the review of the general election. With everything else that’s happening inside the justice portfolio, the biggest increase was around reviewing the general election, which is really about us, right? So that was it. That was the biggest increase.

The other thing that we’ve seen in terms of justice is that we’ve got the Criminal Justice Summit coming up next week. We’ll be attending that, and we’re committed to going along there with an open mind. When you look at the agenda, it’s very weak. It’s very flimsy. There’s nothing there in terms of desired aims, goals, or outcomes. It really just appears to be a talkfest. But we’ll go in there with an open mind, and we’ll make a genuine contribution where we think we can in terms of what this Government’s plans are.

But to us it’s already emerging. It’s already become pretty clear that the investment into corrections has not been the investment that’s needed to be able to deal with the capacity that’s going to be required. There’s no plan—there’s no serious plan that’s been forward around how to deal with meth, how to deal with organised crime, or how to deal with the gangs. These are the issues that should be discussed—these are the issues after nine, 10, 11 months should be starting to emerge and we should have a clear idea around.

Instead, what we’ve seen is a half-hearted effort—or, actually, on the part of the justice Minister, a committed effort—to get the three-strikes legislation repealed. But that got shot down before it got to Cabinet because the coalition partner pulled their support for it when they saw how unpopular it was with the general public and they let their feelings be known.

So the only thing that we can see happening in the justice portfolio at the moment is a determined commitment to diluting our bail laws, our sentencing laws, and our parole laws. And what that basically equates to, what that means, is that the offenders, dangerous offenders—and make no mistake: the people that go to prison should be in prison. On average, they have about 46 convictions—

Hon Willie Jackson: Not all of them. That’s not true.

Hon MARK MITCHELL: —before they go. Well, if that’s not true, someone take a call and point out to me the people that shouldn’t be in prison. I know that you immediately point at the remand; yeah, let’s have a look at the remand. But I can tell you right now the side that I will always fall on, and that is balancing up public safety and community safety against having someone actually sitting in remand. The Government should take responsibility for that instead of outsourcing and passing the responsibility back into the community, and we will continue to take a stand against that.

So, unfortunately, I’ve run out of time, but I would welcome anyone from the Government benches to take a call and respond to any of the issues that I’ve raised in my speech. Thank you very much.

KIRITAPU ALLAN (Labour): Well, Mark Mitchell—the Hon Mark Mitchell—I would be absolutely delighted to take a call. It is an absolute privilege to be the final speaker on the Government benches side for our first ever Budget in nine long years. I want to acknowledge—take my cap off to—the Hon Grant Robertson for your diligence and patience in pulling together something that’s absolutely exceptional for the people of Aotearoa New Zealand. Goodness me, I’m so proud—so, so proud—to stand here today.

Now, I must say, for many of us, particularly the new MPs that came in on this side of the House, we sat there alongside the rest of New Zealand in watching our colleagues in the House while we watched New Zealand go from a country that we could all be proud of—a country that looked after the little guy, a country that punched above its weight—to a country that stagnated, to a country that wanted to sell down State homes, and to a country that couldn’t be bothered investing in its young people, the next generation of New Zealanders.

Well, what we’ve had to do, and what our executive has had to do, in the last very short amount of time is work swiftly to pull together the beginning of a new financial direction to ensure that New Zealand’s economy is on track. I want to also just make acknowledgments about how our economy is on track. We have the wages going up, we’re projected to grow our GDP by 3 percent, and our exporters—they’re looking pretty chuffed right now.

You know, there’ll be a few comments from the Opposition—we’ve heard it all afternoon and we heard it all through question time: “Oh, but business confidence—business confidence.” Well, I want to refer to the Reserve Bank Governor Adrian Orr this week. When he looked at the business confidence and when he released his quarterly financial Monetary Policy Statement earlier this week, he said, “Well, you know what, to be honest, we don’t take notice of the headlines when it comes to things like business confidence. What we do do”—the Reserve Bank, what they do, and what I encourage the Opposition to do—is look to how those businesses are actually tracking internally. The reality is with the wages going up, with GDP projected to continue to go up, business is actually pretty chuffed.

Now, I must acknowledge the colleagues of my contemporary over in the Opposition benches the member for Waikato, Mr Tim van de Molen. Now, he sat here with a straight face and turned to this side of the House and said, “You don’t care about the regions.” We don’t care about the regions! Well, I tell you as an absolutely proud regional member of this Government that we absolutely couldn’t care more about the regions. And what the regions are saying—if the Opposition would like to take a little bit of time, particularly their spokesperson for regional economic development, who lives in Epsom; if he’d like to come out and spend a little bit of time in the regions, I would be more than delighted to take him around the mighty East Coast electorate. What I am hearing from cardholding blue party members, what I am hearing from the Opposition’s own members, is they’re wanting to tear those membership cards up, and you know why? And why is that? It’s because they haven’t felt more heard in the last decade than what they are right now. They’re seeing more of our senior Cabinet colleagues out in the regions.

Now, I refer to the comments of the Hon Paula Bennett. She said, “The regions are laughing at ya.”—referring to us. The regions aren’t laughing; the regions are standing alongside cheering—cheering because for nine long years we have been kicked and shoved about like you wouldn’t believe. Now, for those of us that live in the regions, we find that absolutely abhorrent, and we—for example, in the Eastern Bay of Plenty, over the last 10 or so years, we have gone backwards by about 3.5 to 4.5 percent of GDP compared to the rest of the country. That is a shame—that is a shame.

Now, when we look to the previous Government’s economic growth plans for the East Coast region, know what it was—know what it was? It was oil and gas extraction. Oil and gas extraction was going to be the saviour of the regions. Well, I’ll tell you right now: we have a mobilised the region right now. There are 65 projects that are coming up from the Eastern Bay of Plenty alone seeking the support of this Government to see our region stimulated. And goodness me, to the champion of the region, the Hon Shane Jones, and to the executive that is backing him: kudos; hats off. Te Kaha will be proud when they see their horticultural expansion. Ōpōtiki will be proud when they see their aquacultural expansions come into fruition. Kawerau will be proud when they see that inland port, supported by KiwiRail, up and off the ground, stimulating places like Murupara, places like Minginui. The Opposition might not know where these areas are, but they used to be, in times not so long ago, the backbone of our country. Well, this side of the House, we say it is.

Now, apart from the amazing things that we’re doing in terms of stimulating regional economic growth, I want to turn to the vision that Labour has for our people, and it has always been the same. Norman Kirk articulated it many generations ago: “Someone to love, somewhere to live, somewhere to work, and something to hope for.” If you boil it down to its quintessential basics, what this Government’s first Budget has done, and it will be the first Budget of the Hon Grant Robertson’s very long tenure, is set the foundations for a transformation in the way that we care about people, for the way that we provide the basics for people—not for the top 1 percent, not for the top 5 percent, but for the majority of hard-working New Zealanders out there in the regions and in the urban centres.

This is a caring and compassionate Government, and we see that in the way that this Government has pulled together and put its first bastion project, the Families Package. It was the first time that we had seen a substantial increase in funding for those families since the families package was introduced under the previous Labour Government.

When the Families Package came into force on 1 July, I had the opportunity of visiting a little school, Waiotahe Valley School in the Eastern Bay of Plenty. Its principal is Pat Carrington, the father of the East Coast icon Lisa Carrington. I had the opportunity at that time to go into their school, and, that weekend prior, the website had come live. So I heard from young kids—you know, I was asking them what they knew about what this Government had done. One kid put her hand up and she said, “Oh, I know what the Government does. It helps families like mine.” And I said, “What do you mean by that, young lady?”, and she said, “Well, my family and I, we all sat around the table last night and worked out how much our family was going to benefit from the Families Package.” She said to me that her Mum cried, and I must say that when you have a Government that is enabling over 384,000 families, ordinary Kiwi New Zealand families—from an injection of $5.5 billion into ordinary Kiwi families, and we know the amount of assistance that that will do—to put food on the table and gas in the car, I can only say, as a Government backbench MP, thank you to my senior colleagues.

In the few moments that I have left I want to turn to—this week in the Finance and Expenditure Committee we heard from the Auditor-General. We heard from the Auditor-General this week, and what they told us was that in 2009, in 2013, and in 2016 they were advising the previous Government of the infrastructural needs that our schools and hospitals would need. That was in 2009, 2013, and 2016—and what did they do? They failed to heed the advice of the Auditor-General—one of the most independent advisers in the country. The reality is that the previous Government for nine long years could see that we had an imminent crisis in district health boards and in schools—and what they do? They turned a blind eye. There was a housing crisis on the rise, and what do they do? They turned a blind eye. So to the Hon Grant Robertson—

SPEAKER: Order! Order! The member’s time has expired. The Hon David Carter.

Rt Hon David Carter: I’ve had my go.

SPEAKER: What? Oh, the member’s had a call—no one else? All right. OK. The question is that the motion be agreed to. Those of that opinion will say Aye, to the contrary, No. The Ayes have it.

TIM VAN DE MOLEN (National—Waikato): I raise a point of order, Mr Speaker. Sorry, Mr Speaker. We didn’t hear the call for no.

Hon Member: There wasn’t an option for a noes vote.

Hon Members: There was.

SPEAKER: “Those in favour say Aye, to the contrary, No.”—that’s what I said.

TIM VAN DE MOLEN: Sorry, Mr Speaker. It was too quick.

SPEAKER: Oh, well, I’ll be exceptionally generous. I mean, what I’ve got sounds like it’s getting infectious.

A party vote was called for on the question, That the Appropriation (2018/19 Estimates) Bill be now read a third time and the Imprest Supply (Second for 2018/19) Bill be now read a second time.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 57

New Zealand National 56; ACT New Zealand 1.

Appropriation (2018/19 Estimates) Bill read a third time.

Imprest Supply (Second for 2018/19) Bill read a second time.

Bills

Imprest Supply (Second for 2018/19) Bill

Third Reading

Hon GRANT ROBERTSON (Minister of Finance): I move, That the Imprest Supply (Second for 2018/19) Bill be now read a third time.

A party vote was called for on the question, That the Imprest Supply (Second for 2018/19) Bill be now read a third time.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 57

New Zealand National 56; ACT New Zealand 1.

Bill read a third time.

Bills

Overseas Investment Amendment Bill

In Committee

Debate resumed from 2 August.

Part 3 Enforcement and other miscellaneous matters (continued)

Hon JUDITH COLLINS (National—Papakura): Oh, thank you, Madam Chair. What an excellent choice, I thought—if I do say so myself, with all due modesty, which is sort of none, really. But at least I won’t shout into the microphone like a new member might.

Kiritapu Allan: Or like Dr Smith—he’s pretty good at it as well, and he’s been around a wee while.

Hon JUDITH COLLINS: I think one of the issues is this is really all about how to enforce it—and she’s still shouting. I think it’s really important that when we look at a bill like this and we think about why there are so many crossings out and so many amendments in the select committee stage, we think about a very good piece of work done by the Finance and Expenditure Committee—unfortunately, not good enough to change the bill and get rid of it entirely but, certainly, tried hard in the select committee. The reason that there are so many changes in the enforcement part of the bill is that the enforcement of the Overseas Investment Amendment Bill is going to be very difficult. This bill is really all about saying, “Keep those foreign people from buying our land.”, or, in this case, “Keep those foreign people from buying our houses.”, which I think is an amazing issue, frankly. Where are these people going to take those houses if this bill doesn’t go through? I have, since I’ve been in Parliament—a mere 16 years; hardly anything really—

Hon Member: Too long.

Hon JUDITH COLLINS: —in the scheme of it. Who was that unusual person over there? It was Mr Strange, wasn’t it? Ha, ha! The list MP from Hamilton—list MP from Hamilton.

Hon Member: No, I think he’s from Christchurch.

Hon JUDITH COLLINS: He’s from Christchurch. Anyway, he’s someone who doesn’t necessarily know what he’s talking about.

When I first came into Parliament in 2002, in that election campaign, people then were talking about foreigners coming to buy our land. I asked that question then on the campaign trail in the then seat of Clevedon. I said, “Where are they taking it?” People didn’t seem to have a good answer, but the foreign people that they were after in those days were the Americans, who apparently were coming into New Zealand, buying up land, and making something of it—like actually putting money into it, investing in it, improving it.

Rt Hon David Carter: Oh, outrageous! They must be rich.

Hon JUDITH COLLINS: Outrageous behaviour, frankly. They’re not to be encouraged at any time. As the Rt Hon David Carter says, they must be rich. Well, we don’t want those people, do we! We want people who can’t do all of those things! Well, that’s the way it feels from reading this bill. Enforcement of these issues is actually really tough, and, speaking as a lawyer with 20-plus years’ experience before coming to Parliament, I know just how hard it is, because if people really want to get around this, it can be done. That’s the point.

Labour Governments are actually a great thing for law firms and accountancy firms—not that they actually necessarily like them, but they love the fact that it creates a lot more work, a lot more work getting around a lot more regulation. So, thinking of my former colleagues in the legal profession, they must be sitting there rubbing their little hands with glee, thinking, “We’ve got to think of some more schemes.”, and that’s what happens. Whether it’s in tax, whether it’s in anything else, the more rules that we put in, the more money and time and effort is spent in getting around them, and that’s what will happen. The people who will be caught by this will be the people who didn’t go to all that effort and trouble and expense—you know, the genuine people; the people who were actually just wanting to have a home in New Zealand; those people. I actually think most people will not be caught by this, because this is going to be something that a lot of people are going to spend a lot of time and effort getting around.

What is the great damage in somebody coming in and buying an apartment and then living in it, say, for six months of the year or three months a year, in New Zealand—what is the great damage? I’m just wondering about that, because what I know is this: ever since this Government has been in place, there has been no over four-storey buildings built in Auckland in the CBD as apartment blocks. The reason is this: foreign buyers have already got the message they’re not wanted, and what that’s meant is there are now fewer opportunities for people to buy their first apartment, for people to move out of suburbia, as well, into the apartments in the city—that is why.

This Government has already cut the knees out from under the apartment developers—already done that without this legislation getting in place. This enforcement part of the bill will not be needed, because the message is already there: you’re not welcome. We don’t want your money. We just want to use you. That’s what this Government’s message is to the people who otherwise would be—

CHAIRPERSON (Poto Williams): I’m sorry to interrupt the member. The time has come for me to leave the Chair for the dinner break. We will resume at 7.30 p.m.

Sitting suspended from 6 p.m. to 7.30 p.m.

Hon AMY ADAMS (National—Selwyn): Madam Chair, thank you. I did want to come down and take a further call on Part 3. It’s been, of course, some time since I was last involved in the debate. But I wanted to raise a point that is new, and that is around the information-gathering powers in Part 3, and, particularly—well it’s sections 40 and 41 of the principal Act, but it starts really at clauses 23, 24, 25 of the legislation in front of us.

I wanted to raise a particular concern that the Privacy Commissioner brought to the attention of the Finance and Expenditure Committee, and that is around the very broad powers of information gathering that the bill would put into the principal Act. The Commissioner noted that the overseas investment legislation already has very broad powers of information gathering in it. He noted—and I think I’m quoting fairly—that he was concerned with the width of powers that this amendment bill that is before us would put in place in the legislation. I think his concerns are valid and do need a little bit of time to be worked through. I will be tabling shortly, as this debate progresses, a Supplementary Order Paper (SOP) to make some of the changes that the Privacy Commissioner had suggested be made, and, in particular, it really is specifically to section 41 of the legislation—clause 24 of the bill.

The thrust of this is that the Overseas Investment Act as it currently stands provides, at the moment, that the regulator already has, in fact, quite broad powers to gather information to ensure that there are not offences being committed under the legislation. That’s, of course, quite appropriate. You would need to have that sort of an investigation power. To be quite clear, it makes it very clear that the regulator can gather information to investigate whether there has been an offence committed. It’s not just once they know there is an offence, so they can check in on offences and they can gather information relating to them. But the way the section has been rewritten in this amendment bill takes that much, much further, and the Privacy Commissioner suggested the bill takes it further than is justified. What it now says is that the regulator can gather information fairly much at will, not only for the purposes of enforcing the legislation and offence detection but also to ensure “monitoring compliance, investigating, and enforcing Act and regulations”, and that’s repeated in a number of places through that change to the Act.

What the Privacy Commissioner noted was that, effectively, that gives now—or that would give if this bill was passed—the Overseas Investment Office (OIO) the power to gather information at will about any property transaction in New Zealand, whether or not it has reason to suspect that an offence has been committed. That is an extraordinary number of New Zealanders who will be caught up in that information gathering, and it really does get into a very, very broad-brush access to large tracts of information about New Zealanders. The Privacy Commissioner noted something like 200,000 transactions a year.

This reframed information-gathering power would give the Overseas Investment Office—under the guise of administering this Act—the right to trawl through all sorts of details about property transactions, as I say, under the loose tenor of the maintenance and enforcement of the legislation: monitoring compliance, investigation. That could extend simply into data collection or interesting research and analytical purposes, but when we want to gather information as a country for those purposes, we have frameworks for doing that. We don’t give an enforcement agency the ability to trawl through huge tracts of information about New Zealanders that are likely to have no bearing whatsoever on their work, simply for the purposes of seeing what they can find.

The Privacy Commissioner was of a view, and expressed this view to the committee, that certainly there were some improvements that were made in other parts of the information-gathering powers in Part 3, but he was very concerned in particular with the recasting of section 41. I know that the Minister in the chair, David Parker, has stood in this House on many occasions and confirmed his support for the important work of the Privacy Commissioner. It is one thing that I know every member of this House takes very seriously—our obligations around New Zealanders’ personal information.

I think this committee should properly turn its mind to whether it is right—under the guise of overseas investment and the changes the Minister has said the Government wants to make; almost as an aside tucked away somewhere, and not something that’s had a lot of debate in this Chamber at all—to give the Overseas Investment Office the power to access huge amounts of information about New Zealanders going about their lawful business in the normal way.

So the Supplementary Order Papers that I will be lodging in this respect are going to go through that section 41 and really try to address the concerns of the Privacy Commissioner. I would certainly invite the Minister in the chair to take a call and to explain to us why there is a need for this—why we’ve gone away from simply offence detection enforcement, which I think we can all agree and accept is a necessary part of making sure that the framework that is put in place is properly adhered to—and why the Minister believes the Privacy Commissioner isn’t right and shouldn’t be concerned about the considerable widening of the information-gathering power.

Now, in the Privacy Commissioner’s own words, he said that the powers that the OIO already has under the primary legislation are extensive and broad. He said they had very, very broad powers of information-gathering activities and authorities, and he is very concerned that that very wide scope of powers would be extended this way.

I haven’t heard in this debate—and I’ve been in the Chamber for the vast majority of the debate—from the Minister why those powers need to be extended; what the problem is they’re trying to address; and why, in fact, the Overseas Investment Office needs to go beyond enforcement. Is this, in fact, a statistical data-gathering exercise designed to give the Government information about the property sector more generally? If it is, I think we should hear that and we should understand exactly what information is to be targeted, how it will be collected, and how it will be used.

If it isn’t for that purpose, then I come back to asking why the extension is in place at all. So in the absence of a response from the Minister, and, of course, one that this side of the Chamber finds to be convincing, I think we do have to err on the side of caution.

I’ve worked with the Privacy Commissioner over many years. He is a very sensible and rational and balanced man—as you would expect of a man in his job. I didn’t always see eye to eye with him, and we could have debates around the information that the Government needed. But Ministers in this House, in my view, should never take his warnings lightly. I think everyone in this House is very aware of the high level of public concern around excessive information intrusions and information gathering by the State—what that information is being used for.

One of the core principles of privacy law—and I know this area reasonably well—is that information gathering shouldn’t be any wider than is absolutely necessary for the purpose, and that the purpose for which it is to be gathered and used must be very clearly set out and adhered to. So there is no compelling reason that we have been made aware of. Certainly, the Privacy Commissioner, in noting that he had worked with officials during drafting, was of the view that he hadn’t been made aware of any good reason why that extensive information-gathering power should be in there. In the absence of a compelling reason, I think it is something this House should turn its mind to, and show that it does value personal privacy and information privacy. And if there is going to be an extension, as I mentioned, that should be very explicitly laid out. I would like to see it recorded in Hansard—the sort of information that will be collected and the sorts of uses that will be put to, so that the Overseas Investment Office can be held to account if they step outside that framework.

When you have a debate on a bill as contentious and as strongly opposed as this one is, it’s very common that the focus is on the headline components of a bill—and that’s as it should be and you’ll hear lots of debate over the course of the evening from this side of the Chamber, as you have to date. But we have to be careful that these small changes, which can be very intrusive, don’t slip through the cracks. This is one of those changes, and, as I said, it does deserve a response from the Minister in the chair, and I very much look forward to hearing it. Of course, if that doesn’t come through, then our SOPs will be tabled, and we will certainly look to make further representations about why the committee should support those changes.

Rt Hon DAVID CARTER (National): Thank you, Madam Chair. I’m delighted to take a brief call on the Overseas Investment Amendment Bill, Part 3, and I particularly want to focus on the issue of enforcement. But, first of all, I note the Hon David Parker in the chair, and, as it has been some time since we debated this legislation late last week, it is worth pointing out that this is, of course, the legislation where the Hon Shane Jones rolled the Hon David Parker. This is the legislation about which the Hon David Parker has said, “We’re going to stop all overseas investment.”, then it went back up to Cabinet and the Hon Shane Jones suddenly realised that a billion trees would be impossible without some foreign investment, so he won with a substantial Supplementary Order Paper, and, of course, Mr Parker’s here to try and tidy up the mess having been rolled again by New Zealand First.

But I want to talk about the issue of enforcement and I want the Minister to answer this question. We were told as we went through the select committee that the Overseas Investment Office doesn’t have sufficient resources for enforcement. We were equally told as we went through the select committee process that resources would be forthcoming to allow the Overseas Investment Office to do its enforcement properly. So my question is to the Minister: when will those resources be available? Once this legislation comes into play, there are a large number of opportunities, I think, to rort the legislation, and it’s going to require more resourcing for the Overseas Investment Office. As a person associated with agriculture—and I’m sure the Hon David Parker himself knows of many, many properties, farm properties in particular, which have been sold to an overseas investor, they have gone through the process to get overseas investment approval, they have made all sorts of promises about developing the property, spending more money planting this and that, employing more New Zealanders, and from my local knowledge very infrequently do the purchasers comply.

I can quote one or two examples—I won’t, because I think it’s the Minister’s job to know these examples—but I want the Minister to rise to his feet and give an absolute assurance—

Dr Duncan Webb: You’re making it up.

Rt Hon DAVID CARTER: Dr Duncan Webb’s just interjected saying it doesn’t happen. He’s a solicitor. He’s a solicitor in Christchurch and probably helped formulate some of these applications for the Overseas Investment Office. He knows promises are made and he knows they haven’t been kept. So that’s the first question I have of the Minister: when will the resources be available?

The second question I have—and this is one we teased out with the officials at the select committee without success. It is an issue whereby we can potentially see a real loophole with a forced marriage situation. Imagine an overseas investor wanting to buy an apartment in Auckland and this legislation makes it almost impossible—and if not almost impossible, then very difficult. So this overseas investor says, “Well, I’ve got a way to do it. I’ll shack up with some New Zealand person; make out it’s a marriage. We will collectively buy the house in our joint names as joint matrimonial property.” After three or five years, the arrangement splits and there’s a matrimonial settlement—

Dr Duncan Webb: Oh, come on!

Rt Hon DAVID CARTER: Again, Dr Duncan Webb will be the expert on this, but he couldn’t answer the question at the select committee. So then we get to the situation where a matrimonial property programme is established, and I suspect if the original overseas purchaser is really, really keen on that apartment, he or she will have found a way to make sure that it ends up in his or her name. Now, the officials couldn’t answer how the Overseas Investment Office was going to handle that, so I look forward to the contribution from the Minister, and I see he is itching to get to his feet to make sure that loophole has been plugged.

Now, I have another loophole that I’ve thought of recently—

Hon David Bennett: No, there can’t be another one.

Rt Hon DAVID CARTER: No, I think there can. I think there can. What about a significant farm property in the former electorate of the Hon David Parker, the Otago electorate, which he held briefly for three years.

Hon Member: Did he?

Rt Hon DAVID CARTER: He did. He did; it was unbelievable.

Hon David Bennett: I can’t believe it. Nobody would have voted for him.

Rt Hon DAVID CARTER: No, no, people did vote for him in 2002 to 2005, and then they saw the error of their ways.

But this situation would be if an overseas investor wanted to buy a property, looked at it, and said, “That fulfils all my wishes—to have control of that property—but, oh well, I won’t get it through the Overseas Investment Office.” So what he does is he employs a New Zealand farm manager who has very little equity, and he lends to that New Zealand farm manager 99 percent of the equity at very, very generous interest rates to the overseas investor. So the property is for all intents and purposes, as far as the Overseas Investment Office is concerned, owned by a New Zealander, but this overseas investor with 99 percent of the equity has absolute control and can tell the manager exactly what he or she is to do. The overseas investor then gets exclusive use of that property for as long as he or she likes. I think that’s quite a feasible example and that would be a way to rort this legislation. So there are two examples I give to the Minister, and he’s busy beavering with his officials. “Oh, we hadn’t thought of that.”, the officials are saying, so let’s find out whether we’ve discovered two loopholes, because I think we have. I think we have.

While the Minister is seeking advice, I’m going to resume my seat and I’m going to busy my mind with coming up with another couple of loopholes, because I think there’s heaps of them. I think this legislation won’t work. We’ve got to bear in mind why the Hon David Parker said it was introduced, and I remember when he took the call last week he said it had been introduced to drive down house prices. Well, I saw a little piece on the TV news over the weekend where Sydney and Melbourne prices have declined by 5 percent. And if we listened to Adrian Orr, as the Reserve Bank Governor, last week when he came before the Finance and Expenditure Committee, he said he’d express no surprise at all if they came back by 5 percent here in New Zealand with or without this legislation—without this legislation, in fact.

So I say to the Minister, I now have another question for him. If he’s introduced this legislation to drive down prices of houses in New Zealand, I want him to take to his feet today in this committee and tell us what amount he wants to drive these prices down by. I say there will be a lot of heavily mortgaged—[Interruption] No, no, Dr Duncan Webb won’t know anything. He’s what you call cannon fodder in this debate. He’s just being used. He won’t know anything of significance. But I want to know from the Minister: he wants to drive down the price of housing throughout New Zealand, particularly Auckland—at what stage, and what amount, does he want to drive it down by? Then at what level will he conclude that this dreadful legislation has been successful?

The final point I’ll make in talking about enforcement and other miscellaneous matters is I’ll point out to the Minister that while he sees business confidence surveys as junk, can I say to him it’s the Overseas Investment Amendment Bill that is the sort of legislation that is driving business confidence low, and it will drive it lower. This country needs foreign investment. A foreigner can’t buy a farm in this country and take it away with them.

Dr Duncan Webb: Is Teddington on the market?

Rt Hon DAVID CARTER: I know Dr Duncan Webb probably thinks they can, but they can’t. Let me tell him; I’ve been around a bit longer than he has and they can’t take it with them. They can perhaps farm it judiciously and make improvements. I think in too many cases, as I pointed out with the very first question I put to the Minister, they’ve bought the land and made the promises that they haven’t fulfilled, and therefore I want to know how this legislation’s going to be enforced.

Hon David Parker: Madam Chair?

CHAIRPERSON (Hon Anne Tolley): The Hon David Carter.

Hon DAVID PARKER (Minister for Trade and Export Growth): Responding—

CHAIRPERSON (Hon Anne Tolley): —ha, ha! I beg your pardon.

Hon DAVID PARKER: Did you call me “the Hon David Carter”?

CHAIRPERSON (Hon Anne Tolley): No, of course I didn’t—no, of course I didn’t. Ha, ha!

Hon DAVID PARKER: Ha, ha! I’m happy to take a call and respond to the Rt Hon David Carter. In respect of his query about the 99 percent loan at low interest loaned to the farm manager, of course that would be a silly thing for the overseas owner to do, because the increase in equity in the property would belong to the farm manager. If that wasn’t the reality, because the underlying arrangement was that there was some hidden trust arrangement where the farm manager was, effectively, buying it in trust for the overseas person, then that would be in breach of the Act. In respect of the forced marriage situation—a ridiculous suggestion, and if taken to its logical conclusion would mean that we don’t have any overseas investment rules in respect of farms—

Hon David Bennett: We don’t, now.

Hon DAVID PARKER: —because the same sort of thing could happen in respect of a farm. Well, actually, Mr Bennett—the Hon David Bennett—we do have an overseas screening regime already applying to farms.

In respect of the Hon Amy Adams’ queries relating to concerns about the breadth of information-gathering powers, I agree that the Privacy Commissioner’s concerns should be taken seriously. We believe that they have been. The new section 41(1), inserted by clause 24 of the bill, has as a precondition to the information-gathering powers being operable that the regulator has to have “reasonable grounds to believe that it is necessary or desirable” to be getting that information for reasons that have been particularised in new section 41(1A), which was agreed at select committee following the submissions from the Privacy Commissioner. In respect of the amendments the member proposes, it’s hard for me to comment on them, because despite the time that the member has had, they have not yet been tabled in the committee.

NICOLA WILLIS (National): Thank you, Madam Chair. I want to concentrate on new sections 61B to 61F, inserted by clause 33A, of this bill, because this, to me, is the part of the bill that the Government would be most happy to remain absent from the public mind. This is the part of the bill that I think the Government is probably quite happy to have not talked about tonight, and that I think deserves thorough scrutiny, and that probably hasn’t had the degree of scrutiny that it deserves, due to the rushed way in which this legislation has been progressed.

If we look to the commentary on this bill, what we are told is that the purpose of this bill is to provide “that overseas investors could only obtain consent to buy residential land” in circumstances that are outlined. Three points are made—that they would be developing the land, that they would be using the land for non-residential purposes, and that they hold an appropriate visa. What is not included in that commentary is what we find in new section 61D, which says that the Minister actually has completely broad discretion to decide that there are circumstances that mean that it’s necessary or appropriate for him to deem an exemption. The Minister is able to do this, and he’s able to provide an exemption, and, in so considering, the Minister “must have regard to the purpose of this Act”, but other than that, all the Minister—he or she—has to consider is that there are “factors that seem to the Minister to be relevant to the circumstances.”

So what we see here in these sections 61B to 61F are what I’d call the “get out clauses”. These are what I’d call the “Shane Jones clauses”. These are the bits that are there that rightly acknowledge that actually in New Zealand there are circumstances in which overseas investment aids the economic growth of our country, that it actually assists people to get jobs and to get better incomes, and that there are circumstances in which we should encourage that investment. But instead of saying, “Let’s lay it out clearly in law. Let’s make that obvious. Let’s have demonstrable regulations.”, what this part of the bill says is “Let’s make sure we give a whole heap of discretion to whoever the Minister of the day is, so that in the dark of their office they can have a quiet chat with a few people and they can decide that there are factors that ‘seem to the Minister to be relevant to the circumstances.’ ”

I would draw your attention to the way in which these sorts of clauses and sections could be abused, by giving you a very recent example. That example is the disgrace of an amendment that was attempted to be brought to this House as a way of exempting a particular property from the application of this legislation. And what, of course, happened with that amendment? Well, it is a moment of integrity for this Parliament that the Speaker rejected that, and said actually that is not the means for which a select committee amendment can used. But, of course, members opposite weren’t too concerned about that, because what they know and what the Minister in the chair knows is that new sections 61B to 61F mean that any Minister of that Government can sit down with some people that they quite like—

Hon Amy Adams: With their cousin, for example?

NICOLA WILLIS: —like their cousin, or someone that they would like to invest with in the future, or someone that’s a good friend of someone else, or someone that’s been to similar dinners as they have, and they can say, “Hey, look, don’t worry so much about the Overseas Investment Act in your case, because I’ve actually got these powers, and, in fact, Cabinet has powers to set regulations that can exempt whole classes, or can exempt individuals, from the application of this bill. And so we’ll just do it the way we want to do it.”

I worry about this because I am a member of the Regulations Review Committee, and one of the things that we think about is whether we’re giving broad-brush powers that allow people to do things that are outside the will of Parliament. That is why I started this speech by referring you to the commentary, because nowhere in the commentary on this bill does it say that this bill will apply in the circumstances that members were happy to talk about on the election trail, but also wherever the Minister wants to use the Minister’s discretion. So this is very concerning to this committee, and I would ask the Hon David Parker to address to us the sorts of circumstances in which he thinks there might be other factors that seem to be relevant to the circumstances that would mean that an exemption would be granted.

In giving that example, Minister Parker, I would encourage you to think that perhaps that example may have broader application to this economy of ours, that there are others who may want to invest in this economy that would bring broader benefit, and that the discretion shouldn’t just lie with the Minister of the day. The discretion should be laid clearly out in law so that it is of benefit to all New Zealanders, and not just those who have strong relationships with the Government of the day. These sorts of provisions are highly concerning when a piece of legislation is being rushed through Parliament. They should be brought to the attention of the Parliament and should be addressed.

Hon DAVID PARKER (Minister for Trade and Export Growth): I’ll respond to the issue that’s been raised. It’s deeply ironic that the National Party criticised the fact that the exemption that we were proposing in respect of the lands that have been controversial, the Te Ārai lands, was actually being done by new section 5 in new schedule 1AA, inserted by schedule 1, because we did not want to confer a general regulation-making power of exemption. That’s why—

Hon Amy Adams: No, you’re doing that as well.

Hon DAVID PARKER: No, we haven’t.

Hon Amy Adams: You’re doing that as well—that’s what 61D says.

Hon DAVID PARKER: We haven’t. Well, that’s actually—this is why members should pay attention when they’re on select committee, because this was well—

Hon Amy Adams: Don’t be patronising.

Hon DAVID PARKER: Well, I’m actually not being patronising. I’m actually asking the member to read the bill.

Hon Amy Adams: That’s pretty patronising.

Hon DAVID PARKER: Well, actually, I would have thought that—

Hon Amy Adams: 61C is in there as well as Te Ārai. You know that.

Hon DAVID PARKER: New section 61C—OK, well, the provisions that are already in new sections 61B to 61E in clause 33A, the exemption provisions, are very narrow, and they were deliberately cast to be narrow because we didn’t want a future Government to be able to do what the last Government did, which was, effectively, by changing regulations and letters of direction, enabling further sale of New Zealand rural land when they said that they were going to tighten it up after the Crafar Farms sale. So one of the purposes of this Government was to have a very narrow regulation-making power in respect of future exemptions from the ban on buying existing homes in New Zealand.

Now, I also share the concern that the member Nicola Willis said, that regulation-making powers ought to be constrained. I have sat on a number of occasions on the Regulations Review Committee, and I agree that regulation-making powers ought to be constrained rather than open-ended. In this case, it’s both, for the reason that I don’t think this particular policy, if it goes through with the will of Parliament, should not be able to be undone by regulations of either this Government or any future Government, and so this regulation-making power is already tightly constrained. Supplementary Order Paper 52 in my name tightens it even further. We were advised by Treasury officials that it was already a tight regulation-making power that had to be related to the purposes, which are to restrict overseas ownership of residential land rather than to enable it, but notwithstanding that, the Government thought we should be even tighter than that.

I would refer the member to page 3 of Supplementary Order Paper 52 in my name, which inserts new section 61BA, “Purpose of exemptions”. This actually goes to the very issue that Nicola Willis has spoken to, and it says that “The purpose of sections 61B and 61C”—which were the clauses the member complained about—“is to—(a) provide flexibility where compliance with this Act is impractical, inefficient, or unduly burdensome but where the purpose of this Act can still be substantially achieved through the terms and conditions of the exemption”. It’s very narrow. The other exemptions are in (b), to “allow for exemptions that are minor or technical;” or (c), to allow for exemptions in respect of two matters: land that’s to be used for diplomatic or consular purposes—so, embassies—and then the other one is for registered charities.

Then there are some other minor ones that are listed also. I’ll read these out for the sake of complexion. This is 61BA(c)(iii) through (vi): “(iii) minor increases in the ultimate ownership and control [of an] overseas [person] if consent has already been granted for [that] overseas [person] to own or control sensitive assets:”—so, for example, if they owned an overseas company, or a company was 29 percent overseas owned and it lifted the shareholding to 32 percent owned, then that wouldn’t require a separate consent; their existing consent could stand—“(iv) security arrangements that are entered into in the ordinary course of business:”—that’s not the sorts of security arrangements that the Rt Hon David Carter has referred to, but the banking industry was concerned that we make sure that we didn’t have mortgages and things caught up in the Act—“(v) relationship property as defined in section 8 of the Property (Relationships) Act” and “(vi) interests in land acquired for the purpose of providing network utility services.”

Those are the only instances where the regulation-making power can be utilised, and it is very narrow. So any future Government that wants to undo this—assuming that Parliament passes it—will have to come back to this House and actually convince the members of Parliament of this House, and front up to the public in New Zealand, in respect of any attempt to undo this legislation.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair—excellent choice. I also want to address new sections 61B to 61E, inserted by clause 33A, but I’d like to first respond to Minister David Parker’s point about his Supplementary Order Paper (SOP) 52. I think we’re seeing this too often with the bills coming before the House from this Government, where they haven’t done the work before the bills are drafted, and then we end up with an SOP that the Finance and Expenditure Committee didn’t have an opportunity to actually examine and explore, all because the work wasn’t done in the beginning. We’ve got the Canterbury Earthquakes Insurance Tribunal Bill as a great example where, in fact, the officials are very critical, because there wasn’t any consultation done, and the bill’s very badly flawed. I think we’re in the same position here.

Why are we rushing on this? Now, I accept that the TPP—apparently there’s another couple of initials—

Hon Member: CPTPP.

STUART SMITH: No, the TPP it is, and everything that it all started out to be, apart from a couple of initials that went in in the beginning—that is not a good enough excuse. There could’ve been more work done, and there should’ve been more work done, and the select committee process should’ve been delayed to look at that. I don’t actually believe that it will achieve what the Minister has just said. I still believe that we have, essentially, a “Henry VIII” clause in here for the Minister to do some sort of a deal that is not out there for people to see. So I don’t agree with that.

What is driving this is this headlong rush towards getting some forestry in there, and that’s why these carve-outs have come in—and not very well-thought-out carve-outs. It was very interesting in select committee two weeks ago, when Ian Proudfoot, who is the global head for KPMG on agriculture, came along to the Primary Production Committee and he said—and I think I might not get the quote exactly right—something like, “The last thing we want is another central North Island forest, because it kills rural communities.” Yet that is exactly what they’re aiming to do.

Now, we heard the Minister on his feet today extolling how many jobs they were going to get. That is one side of the equation. We like double-entry accounting here, so what are the job losses? They’ll be significantly more than that. On top of that issue, we have the issue of, particularly, pine forests acidifying the land. Nothing grows underneath the pine trees. So we’ve got all these issues—quite significant environmental issues—because of this headlong rush into this forestry which is ill-thought-out.

I can give you an example of where that goes wrong. In my electorate some years ago, the old Forest Service and the catchment board saw the great wisdom of forestry, and they got up in an aircraft and spread pine tree seeds out the door of the aircraft.

Hon David Bennett: No way!

STUART SMITH: They did—all over conservation land, or what went on to be conservation land, which is now infesting private property. That is making impenetrable pine forest, choking out all the native vegetation, completely changing the landscape, spoiling the landscape value for trampers because they can’t get through it—all these sorts of things because of an ill-thought-out policy that has really far-reaching consequences, way beyond the today. When we’re talking about forestry, we are talking at least a 25- to 30-year rotation, so we have to think about what’s going to happen in that sort of a time-scale. Then to have something with that sort of time horizon, that we can’t have the select committee extend their time a little bit to consider a very substantial SOP that has far-reaching consequences, is unbelievable and it’s really poor process. I think we as a country deserve far better than that.

I know the select committee were frustrated—at least half of them were; the other ones were doing as they were told—but I think that we deserve better than that in this country. We’ve put a lot of money and effort into getting our country moving in the right direction, and on one Minister’s folly we’re going to wind it back many years, with far-reaching environmental consequences. I think that is a huge shame for New Zealand, so shame on the Minister, shame on the Minister from New Zealand First. I think that rural New Zealand, provincial New Zealand, is far more intelligent than that. They don’t like this one bit.

Hon DAVID PARKER (Minister for Trade and Export Growth): The irony of that speech is it’s complaining that the screening regime in respect of forestry is now too loose. If this amendment legislation was not passed, there would be no effective screening regime for forestry. That was discussed with the select committee—

Hon Amy Adams: No, that’s not true—completely untrue.

Hon DAVID PARKER: —and has been discussed in the House. It is absolutely true, because unless this legislation passes, forest registration rights are not within the screening regime. Any forest can be purchased, whether it’s a freehold, leasehold estate. It can also be transferred, for multiple rotations, as a forestry registration right. Therefore, if forest registration rights were not included, effectively, there was no right not just of this Government but of subsequent Governments to control it. Because the Government is doing this, a future Government can change those rules. They can loosen them, they can tighten them. If this change was not made, New Zealand would have, in effect, lost the ability to control overseas investment in our forests.

In respect of the amendment that the Hon Amy Adams made reference to her intention to put to the House, it now has been submitted. It says, “Delete clause 24(2)”. The Labour Party and the other Government parties will not be supporting that amendment, for the reasons that the Rt Hon David Carter alluded to earlier: there is a problem in New Zealand with monitoring compliance with overseas investments, where investors promise to do things and haven’t. One of the things that is needed is more information-gathering powers on the part of the regulator to check whether they have. That is the reason, or one of the reasons, why we are making the amendments to the Act, in clause 24, and if we were to go back and agree to the Hon Amy Adam’s amendment, we would be removing those provisions that are necessary to improve the information-gathering powers of the Overseas Investment Office.

ANDREW BAYLY (National—Hunua): Thank you, Madam Chair—so many issues to talk about. I just want to respond on that issue around the forestry. Whilst I don’t really want to focus on that, the issue is: why would you want a New Zealand industry that’s already 72 percent owned by foreigners to be able to get bigger—100 percent? I just do not understand that rationale. I don’t think the Minister has properly addressed that issue in its totality.

The other thing I want to return to is my colleague the Rt Hon David Carter—a very insightful man, I have to say. I think you brushed aside his example, which was the case of a foreigner who works with a farm manager, gives him 1 percent, and then, basically, controls the farm manager. Of course, the Minister said, “Oh, well, that won’t work, and there are plenty of rules.” Well, actually, I don’t think it actually needs to be 99 percent; it only needs to be 75 percent—i.e., the foreigner could own 24.9 percent. But if you were a smart commercial lawyer—and I know there are some frustrated lawyers in this House. I know there are some people who were smart and might be smart, but we need good commercial lawyers, and, unfortunately, not many of those are in Christchurch.

But the issue I want to raise is that if you wanted to be smart—to answer David Carter’s question—what you might do is you would structure the affairs with that farm manager where you might have two different classes of shares with different entitlements. You might have different powers around the directors—one of which the foreigner might own—which would say that his or her right is to have a veto right. Therefore, effectively, by a negative arrangement, they could actually still control what the activities of that business are, and there would be rights around the dividends.

To actually deal with the equity issue that the Minister raised, which is “Why would you do that? It’s a rather silly commercial arrangement.”, what you would do is you would have a bullet payment at the end of the term of the lease or the property arrangement or the partnership or the company—at which point the foreigner would get full value, and at which point he or she would need to sell it—thereby, still capturing the upside. Now, if there were smart lawyers like Dr Duncan Webb, who, if he had actually thought about this for more than five minutes, might have come up with the answer—and I don’t think the Minister has actually properly thought it through. I think that was a very valid scenario that the Rt Hon David Carter put up.

Rt Hon David Carter: Well, he said there’d be no equity because the prices are going to decline, anyway.

ANDREW BAYLY: Oh well, they’re going down. We haven’t heard about the reduction in the price that he wants in farmland and residential land, and I really would like to hear that figure, because I think many New Zealanders would also like to know what the value of their land or home is when they’ve got a mortgage on it. I think that’s an important aspect.

Now, what I really wanted to talk about was new section—[Interruption] I know. There are so many things in this bill.

Hon Amy Adams: You’re just warming up.

ANDREW BAYLY: I know—I’m just warming up. Of course, new section 51A, under the subheading “Statement relating to compliance with consent requirement”—and it’s a bit of a theme. The Hon Amy Adams was talking about it, and the Rt Hon David Carter, and I’m sure Mr Bennett’s going to talk about this. This is the issue about compliance. I’ve got to say that the last time I spoke on this bill, right at the close of play last week, I was cut off at the pass, because—

Hon David Bennett: No way!

ANDREW BAYLY: I was, and I was very disappointed, because we were talking about the Overseas Investment Office (OIO).

As people have noted, we asked the OIO what were their resourcing. We heard that at the moment, they process a few hundred OIO requests a year—and, of course, quite rightly so. In general, I think they do a very good job. But the missing figure that I just couldn’t say last time was that when we asked the OIO about this, they said that their estimation, and it could be much higher, was 4,000 consents a year—4,000 OIO consents that they are going to have to review every year.

Of course, what new section 51A deals with is the requirement for the foreigner to make a statement. We had a long conversation on this because one of the issues was who should be making that statement and whose responsibility was it to make that statement. When the bill first got introduced by the Minister, it placed the obligation on the conveyancer. Of course, we all know what a conveyancer is. It means a lawyer or conveyancer under the Lawyers and Conveyancers Act 2006.

Madam Chair, Madam Chair, Madam Chair.

CHAIRPERSON (Hon Anne Tolley): I haven’t rung the bell yet. [Bell rung] Andrew Bayly.

ANDREW BAYLY: Thank you, Madam Chair. So what this new section 51A requires is, in effect, that a foreigner acquiring an interest in residential land must make a return, and that interest is defined as “a freehold estate or a lease, or any other interest, for a term of 3 years or more (including rights of renewal,”. Of course, what the foreigner must do is actually write a statement to the best of their knowledge and belief saying that they have met the requirements of new section 51A and also whether, in fact, they are acting on behalf of someone else. So we’ve got nominees—we might have foreigners acting on behalf of other foreigners. So that’s all captured under new section 51A(2), and, on the face of it, that looks fine.

Of course, the question then becomes: who lodges it? That’s covered under new section 51A(5), which states that the foreigner “must, before the instrument is lodged, provide the statement, or a copy of the statement, to the conveyancer who will lodge, or direct the lodgement of, the instrument.” So, of course, by implication, the foreigner can’t make that lodgment, but a conveyancer must. Of course, this is where some of the issues start to arise, because in the context of what I was talking about there and the number of consents—4,000 consents—there is the potential for the foreigner and the conveyancer to misinterpret the rules and, secondly, what it means for the OIO, such as whether, in fact, they know it’s been done, whether it’s been done in the prescribed period of time, and all those sorts of issues.

One of the clauses states that if you don’t do it on time, there’s a $20,000 fee, which sounds quite reasonable on the face of it. But when you’re talking about large chunks of money with large values of land, in the scheme of things, $20,000 is actually a very small fine. In fact, you might take that as part of the business cost of doing this.

The requirement is that they will have to sell the land at some point in time, but the issue I’ve got is how do we make sure that those obligations are met in a timely way, how does the OIO go about doing that, and, of course, there is the resourcing around that and the cost relating to that. We started to talk about the cost that the OIO might have to incur with the additional people, and I’d really like to hear from the Minister what is the estimate of the number of new people that the OIO will have to employ to meet these requirements, because, if we are talking about substantial numbers already doing the few hundred consents at the moment, we are talking about millions and millions of dollars of compliance costs. So that’s just on the first period when the first consent is sought.

The other thing that came out of the Finance and Expenditure Committee was what happens in subsequent rollovers after three years, and how does the OIO go about following those? So if you are having 4,000 transactions a year, quickly, within four years, you’d get to 16,000, and, obviously, it cascades and goes beyond that. The issue is how the whole process is to be managed in a proper manner so that we can make sure that, in fact—if it is the real intent of the Government to make sure that they’ve got some control over it—it is adequately resourced and it actually complies with the bill. I think these are issues that I’d very much like to hear from the Minister on.

The other issue round this whole thing is the rules around the regulator requesting the disposal of property. This is covered in new section 41E—and I know some of my colleagues may have traversed this—and this is the requirement to enforce those conditions. I think that when you’re talking about people who are very sophisticated about the way they’re investing, it’s very important that we have clarity around those provisions and that they are brought to bear quickly at the time that they need to be applied, because otherwise—again, I’d just make the point—even under new section 41E, we’re going to see some potential for these transactions to still slip through underneath the radar and not actually comply with this legislation.

I think that these are fundamental issues which I haven’t heard the Minister speak about. I am dying to hear the Minister talk about it—

Hon Amy Adams: Oh, don’t die—that’d be a shame.

ANDREW BAYLY: —in a figurative sense—because this is essential to this piece of legislation and whether, in fact, it’s going to work.

CHAIRPERSON (Hon Anne Tolley): I am going to give the call to the Hon Amy Adams, but before I do, can I just make the point that where there is a case for members who have, for one reason or another, limited mobility—and I am conscious that we have a couple of walking wounded as a result of the Parliamentary Netball Team at the moment—it is perfectly in order, where you are having difficulty getting to your feet quickly enough, to gain the attention of the Chair in some way or another.

Hon Amy Adams: Wave my crutch!

CHAIRPERSON (Hon Anne Tolley): Well, I don’t want it going—you could, as the member has done, send the Chair a note. But it is perfectly reasonable.

Hon AMY ADAMS (National—Selwyn): Thank you, Madam Chair, and I appreciate your forbearance. I have to tell you that the effort of leaping up and down as my colleagues all fought for the call was getting somewhat distressing to me, so I thank you for your guidance and your forbearance.

I want to come back to the issue I raised earlier around information gathering, and respond to the Minister’s response. He has dismissed the amendment that I’ve put on the Table on the basis that he says that it’s important the Overseas Investment Office has the ability to ensure compliance of overseas investors with the terms of their consent. And I’ve got no problem with that; I agree with the Minister. Of course it’s important that an overseas investor, where conditions have been imposed—New Zealand should have a way of checking that those conditions are complied with and enforcing them if they aren’t. That is not the point that I was raising, and that is not the point that the Privacy Commissioner was raising.

The point that I’ve raised in my earlier call, and that my amendment addresses, and that the Privacy Commissioner raised—which, with respect, Mr Parker, has not been fully addressed by the Finance and Expenditure Committee—is that the bill doesn’t limit itself to checking compliance with conditions by overseas investors. What it does is enable information gathering that, effectively, can extend across any property transaction in New Zealand. And that is why I have suggested, as the Privacy Commissioner did, that section 41 in clause 24 of the bill reverts to its original drafting, and that’s what my amendment does.

So simply saying “Well, we need it so that overseas investors can be held to account.” is, frankly, an absurd response in that that is not the issue. That is already possible under certainly the opinion of the Privacy Commissioner, and certainly it would be extremely surprising if that weren’t the case in the core Act. The issue is why the information-gathering powers now extend to non-overseas investors, to transactions that don’t include an overseas investor. And if the Minister is indicating a willingness to revise section 41 to make it clear that those powers only apply to an overseas investor and in respect of a transaction that the Overseas Investment Office has approved or in some way dealt with, then I would welcome that amendment, but right now that is not the crafting and the framing of those clauses that I’ve referred to.

In a similar vein, if you look at the very last clause of Part 3 before we get into the schedules, clause 35—and this is a related point, but I accept that I’m outside the scope of my amendment, at least for now—that one deals with amendments to the Fisheries Act. Now, it’s a consequential amendment, but it’s interesting because the one change it makes is to replace the term—and, again, relating to information gathering—“monitoring” with “information-gathering”. That’s the very point I’m making, that the information-gathering powers have now gone beyond monitoring compliance and detecting offences to information gathering over the whole sector.

So, Mr Parker, I’m sorry. Your response that this is necessary for enforcement and compliance simply doesn’t stack up in light of the wording of your own bill, which I have certainly read and hope you have, and it certainly doesn’t stack up with the advice to the committee from the Privacy Commissioner. Now, his advice to the committee was very clearly that section 41 should revert to the original drafting in the primary legislation. It does not do that. The bill we’re debating right now adds in a newly expanded section 41, and my amendment puts to the House that that is not warranted, it has not been justified, and it is not sufficiently constrained.

Now, Mr Parker, taking to your feet and simply saying “Well, we need it for compliance.” when that is the whole point—that it goes beyond that—is not a response. Now, I would ask the Minister in the chair to either tell us why the power now entitles information gathering across all property transactions or agree to constrain it to circumstances that the Minister himself described, which are circumstances involving ensuring compliance of an overseas investor with their conditions, because this side of the Chamber would have no difficulty with that. But if this debate is going to be meaningful and if the Minister is to have any respect at all in terms of his bona fides in this debate, he will address it on its merits and not refer to some fatuous response that doesn’t deal with the point being made and with the criticisms of the Privacy Commissioner.

I would like to think that he would have read the Privacy Commissioner’s concerns, given his somewhat unfair attack on me earlier in his response, and if he has, he will know that that’s exactly what the Privacy Commissioner said: don’t make section 41 wider, limit it to what’s currently in the Act. What’s already in the Act is very broad and enables detection. I can see from the words that that’s not what’s there.

Dr DUNCAN WEBB (Labour—Christchurch Central): I move, That the question be now put.

Hon DAVID BENNETT (National—Hamilton East): Thank you, Madam Chair. It’s great to be able to speak on this bill, and I’d like the Minister to respond to my comments. I fear he won’t respond, because he’s only responded to issues which he feels he can bat away, and he’s left all the hard questions outside of the ambit of his response. My question is: why is the New Zealand First and Labour Government now selling our land overseas? During the election campaign, it was very obvious they made an issue about land sales and said that no more land should be sold overseas. That was their whole campaign. In fact, a whole political party is based on that, being the New Zealand First Party. And here we come to this legislation here tonight.

This legislation gives an exemption to land sales going through the Overseas Investment Office if it’s for forestry. So outside there, in the public, if anyone’s listening, if there is a purchase of land that is less than a thousand hectares—that means the best land in New Zealand, because it’s in smaller blocks and smaller farms—it’s now got the easy run for an overseas investor. Previously, those overseas investors had to show that they were adding value to that property, that they were going to turn it into something different, that they were going to add a new industry, employ people, invest in that property. Now all they have to do is say “I’m going to put it in forestry.” and they don’t have to worry about improving anything. I can’t understand why the New Zealand First - Labour Government is allowing that to happen, other than the fact that they need to satisfy their promise for more trees.

But it gets worse. The New Zealand Government will, in fact, be paying that overseas investor to buy that land. So for all those people listening, what this bill does is because they’re going into forestry, they will now get those forestry credits and deals that the Minister has given through the Primary Growth Partnership fund, through the regional fund that they are looking at. Their regional fund will enable overseas investors to get paid for investing in forestry. So the Labour - New Zealand First Government that was against sales to overseas people is now paying overseas people to come in and invest and buy land, and they don’t have to meet the criteria they would have had to in the past. That’s the question I want the Minister to answer: is that true, that scenario, or not? Can a foreign investor come over here and now get an easier ride than they would have had before as long as it’s forestry land, and potentially could that person also get paid to do that?

Then it gets worse. We will never know how much they are getting paid. Under the regional growth fund, those kinds of conditions of those contracts are commercial realities that can’t be disclosed at any point or in any form. Under this legislation, the confidentiality clauses in Part 3 will mean that those investors won’t have that information put to the public. In the past, if you had been an overseas investor, that investor would have had to prove in a public form what added value they were going to do to the property. Now that overseas investor gets a free ride, gets paid by the New Zealand Government to do it, and nobody will ever know how much they get paid, apart from a couple of Ministers that are sitting in the chair that signed it off. That is a disgrace to the New Zealand public and it is selling New Zealand down the drain. It is selling New Zealand land for nothing—in fact, giving the people that are going to buy that land a freebie. That makes no sense, and that is exactly the hypocrisy that we see in this Parliament time and time again through these forestry deals that they have to make to ensure they can meet that promise and that commitment.

I say to David Parker, the Minister: don’t stand for that. As Minister, I know there are coalition deals that have to be done, and I know that you’ve signed this with Winston Peters, but, as Minister, in your heart of hearts you know this is wrong. You know that you’re actually paying for overseas investors to come here, take our best land, not have to prove what they’re going to do, and at the same time potentially get a return on that. And I bet you he doesn’t get up and answer that straight. He won’t answer that straight. He won’t do that. He’ll tell you a lot of waffle. He’ll tell you “Oh, that’s wrong.” and that, but he won’t answer it straight.

Hon DAVID PARKER (Minister for Trade and Export Growth): I’m very happy to respond to that. There is nothing in this bill about paying overseas people to buy or be subsidised to buy land; so I’m not sure where the Hon David Bennett gets that in this committee stage of the debate.

There is still this continuing misunderstanding which was displayed not just by the Hon David Bennett but also by Andrew Bayly. Andrew Bayly asked why, with 72 percent overseas ownership of forestry land—and he’s right with that statistic—would we want to have more. Well, actually, a future Government may not want to have more. Unless this law is passed, a future Government will not, in effect, be able to control overseas investment of New Zealand forest land, because, as I have said previously, and to which no one has been able to disagree with, any forest in New Zealand can be sold as a forest registration right for multiple rotations, for 100 years. And, unless that loophole in the legislation is plugged before CPTPP comes into effect—and the last Government wasn’t going to plug it but we are—New Zealand would have an ineffective screening regime in respect of forestry assets.

In respect of the Hon Amy Adams’ point, we do need information-gathering powers that are broader than monitoring of consent conditions. We need to be able to police the regime as other members have said, including checking whether people are trying to avoid the obligations in respect of residential land. That’s why the balance has been struck as set out in clause 24 of the bill. And I repeat: we won’t be supporting the member’s Supplementary Order Paper.

CHRIS PENK (National—Helensville): Thank you, Madam Chair. I’d like to turn the attention of the committee to the part of the bill, within Part 3, obviously, which we’re discussing, in relation to the serving of notices or documents. The significance of this little part of the bill—or the part within the part—is, of course, that notifications to consent holders, and so on, are very important for the purpose of notifying where something might have been done wrong, to put it rather bluntly—for example, conditions within a consent might not have been met, and so forth. So it is a significant area of the bill, notwithstanding that it’s somewhat technical in its nature, and I would ask for your forbearance as I take you through, Madam Chair, and those others listening, a few points that are quite significant in relation to how those notices and documents are to be served.

First, it’s section 54, as it will be, set out in clause 32: we see the address for service specifies that a postal or street address in New Zealand must be given, but later on, in section 54A, we see that it’s, in fact, acceptable to serve notices by electronic means. So it seems to me sensible, and perhaps the Minister has a view on this himself, that, actually, as an alternative to a postal address or a street address in New Zealand, simply the provision of an electronic address—for example, an email address—might be just as acceptable. If I were to reach into the not so distant past, I could almost suggest a facsimile or some other means, but I think an email address would be pretty sufficient for those purposes.

By providing that clear ability to serve notices in an electronic fashion, we would be able to get around some of the difficulties that are set out in section 54A, whereby it’s not always clear where the documents have been served; whereas, by email, that’s much easier to evidence. In terms of the delivery and, indeed the receipt, the service of the document is generally faster—invariably faster, in fact—and it doesn’t require someone to be waiting by the postbox anxiously for the service of a notice at any given time. In the case of someone who might be from overseas, for reasons that my colleagues—in fact, members on both sides of the Chamber—have outlined, that might well be the case in certain situations, forestry or other, and that being so, to provide a means for service of documents electronically would actually be useful in that sort of transnational or, indeed, overseas buyer kind of a way.

A further small anomaly and, again, I would be grateful if the Minister were to address it, is that in section 54A(1)(b)(i) we’ve got a situation where a lawyer or conveyancer who’s provided services to that person, defined as person A, can receive the documents satisfactorily. But I don’t know why it would be that a lawyer for that person in general—for example, someone who has received instructions more recently—could not receive those documents or those notices as well. And I draw the attention of the committee to subsection (4), which states that the section would apply “despite any other rule or law.”, which is a pretty brave statement, I think, in the sense that it displaces the usual notion that an agent can be exactly as implied by the term “agent”; that is to say, someone who is acting on behalf of the person—in this case, the landowner or the would-be landowner—for the purpose of receiving those notices.

So with these slight anomalies, I would encourage the Minister to take a call on that and, in particular, further to those points that I’ve made with regard to subsection (1)(b)(iv), again within section 54A, talking about the fact that an agent in New Zealand can only be the official recipient of a notice if A “is absent from New Zealand,”. But, of course, if A is a person who is still in New Zealand but nevertheless would rather that an agent receives the documents, then there seems to be absolutely no reason that the agent couldn’t stand in the place of that person. And it might be, for example, that the person A doesn’t have good English language skills—perhaps if they’re an overseas person or a member of Parliament—and, for that reason, I think there’s a number of little clarifications that might be usefully advised by the Minister, perhaps, in conjunction with his officials, who, no doubt, are very familiar with the construction of this particular part of the bill.

Hon RUTH DYSON (Senior Whip—Labour): I move, That the question be now put.

A party vote was called for on the question, That the question be now put.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 56

New Zealand National 56.

Motion agreed to.

The question was put that the amendments set out on Supplementary Order Paper 75 in the name of the Hon David Parker to the proposed amendments set out on Supplementary Order Paper 52 in his name to Part 3 be agreed to.

A party vote was called for on the question, That the amendments to the amendments be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 56

New Zealand National 56.

Amendments to the amendments agreed to.

The question was put that the amendments as amended set out on Supplementary Order Paper 52 in the name of the Hon David Parker to Part 3 be agreed to.

A party vote was called for on the question, That the amendments as amended be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 56

New Zealand National 56.

Amendments as amended agreed to.

The question was put that the following amendments in the name of the Hon Amy Adams to clause 24 be agreed to:

delete clause 24(1)

delete clause 24(2)

A party vote was called for on the question, That the amendments be agreed to.

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendments not agreed to.

A party vote was called for on the question, That Part 3 as amended be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 57

New Zealand National 56; ACT New Zealand 1.

Part 3 as amended agreed to.

Schedule 1

The question was put that the amendment set out on Supplementary Order Paper 75 in the name of the Hon David Parker to the proposed amendments set out on Supplementary Order Paper 52 in his name to schedule 1 be agreed to.

A party vote was called for on the question, That the amendment to the amendments be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 56

New Zealand National 56.

Amendment to the amendments agreed to.

The question was put that the amendments as amended set out on Supplementary Order Paper 52 in the name of the Hon David Parker to schedule 1 be agreed to.

A party vote was called for on the question, That the amendments as amended be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 56

New Zealand National 56.

Amendments as amended agreed to.

A party vote was called for on the question, That schedule 1 as amended be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 57

New Zealand National 56; ACT New Zealand 1.

Schedule 1 as amended agreed to.

Schedule 2

The question was put that the amendments set out on Supplementary Order Paper 52 in the name of the Hon David Parker to schedule 2 be agreed to.

A party vote was called for on the question, That the amendments be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 56

New Zealand National 56.

Amendments agreed to.

A party vote was called for on the question, That schedule 2 as amended be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 57

New Zealand National 56; ACT New Zealand 1.

Schedule 2 as amended agreed to.

Schedule 3

The question was put that the amendments set out on Supplementary Order Paper 52 in the name of the Hon David Parker to new schedule 3 be agreed to.

A party vote was called for on the question, That the amendments be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 56

New Zealand National 56.

Amendments agreed to.

The question was put that the following amendment in the name of the Hon Amy Adams to new schedule 3 be agreed to:

remove clause 4 and replace with the following:

4 Dwellings in large residential developments that are purchased off plans

(1) This clause applies in respect of land that is being used, or intended to be used for 1 (or more) of the following):

(a) in the construction of 1 or more buildings as 1 development, where the total number of dwellings is at least 20; or

(b) to increase the number of residential dwellings in 1 or more buildings, where the number of residential dwellings in the development will increase by 20 or more.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

CHAIRPERSON (Hon Anne Tolley): Members, there are 50 amendments proposing amendments to schedule 3 to exempt overseas investments in sensitive land involving different primary industries. These amendments are so similar in substance that I think I will test the will of the committee to make such amendments by putting the question on a broad selection of these very similar amendments.

The question was put that the following amendment in the name of Stuart Smith to schedule 3 be agreed to:

In Schedule 3, new Schedule 3, after clause 8, insert:

Exemptions in respect of overseas investments in sensitive land involving viticulture

8A Area of viticulture activity less than 1,000 hectares

(1) A transaction does not require consent to the extent that it will result in an overseas investment in sensitive land (the relevant viticultural investment) if—

(a) the relevant viticultural investment is the acquisition of a right to use land for viticultural activity (the relevant viticultural right); and

(b) the area of the relevant viticultural right is less than 1,000 hectares.

(2) Subclause (3) applies to a transaction that will result in an overseas investment in sensitive land (the relevant viticultural investment) if—

(a) the relevant viticultural investment is the acquisition of rights or interests in securities of a person who owns or controls (directly or indirectly) a right to use land for viticultural activity that is an interest in land described in section 12(a) (the relevant viticultural right); and

(b) the area of the relevant viticultural right is less than 1,000 hectares.

(3) To the extent that the transaction will result in the relevant viticultural investment, it does not require consent in relation to the relevant viticultural right.

(4) Subclause (1) or (3) (as the case may be) does not apply if, immediately after the relevant viticultural investment is given effect to, the sum of the following area is 1,000 hectares or more:

(a) the area of the relevant viticultural right:

(b) the combined area of all other viticultural rights—

(i) that related viticultural investors acquire in the same calendar year as that in which the relevant viticultural investment is given effect to; and

(ii) that are for a term of 3 years or more (including rights of renewal, whether of the granter or the grantee).

(5) For the purposes of subclause 4(b)(i),—

(a) related viticulture investor means—

(i) the person who makes the relevant viticultural investment; or

(ii) any associate of that person; or

(iii) a body corporate related to that person or to any associate of that person (as determined in accordance with section 12(2) of the Financial Markets Conduct Act 2013); and

(b) a related viticulture investor (B) is treated as acquiring a viticultural right if—

(i) B acquires rights or interests in securities of a person (C) who owns or controls (directly or indirectly) the viticultural right and, as a result of the acquisition, B has (either alone or together with B’s associates) a 25% or more ownership or control interest in C; or

(ii) the viticultural right comes under the ownership or control (direct or indirect) of a person in whom B has (either alone or together with B’s associates) a 25% or more ownership or control interest; and

(c) it does not matter if a viticultural right is acquired by a related viticulture investor before the relevant viticultural investment is given effect to.

(6) In this clause, area, in relation to a viticultural right, means the area of land covered by the viticultural right (including any right, whether of the grantor or grantee, to have the original area increased).

A party vote was called for on the question, That the amendment be agreed to.

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Amy Adams to schedule 3 be agreed to:

In Schedule 3, new Schedule 3, after clause 8, insert:

Exemptions in respect of overseas investments in sensitive land involving pipfruit growing

8A Area of pipfruit growing activity less than 1,000 hectares

(1) A transaction does not require consent to the extent that it will result in an overseas investment in sensitive land (the relevant pipfruit growing investment) if—

(a) the relevant pipfruit growing investment is the acquisition of a right to use land for pipfruit growing activity (the relevant pipfruit growing right); and

(b) the area of the relevant pipfruit growing right is less than 1,000 hectares.

(2) Subclause (3) applies to a transaction that will result in an overseas investment in sensitive land (the relevant pipfruit growing investment) if—

(a) the relevant pipfruit growing investment is the acquisition of rights or interests in securities of a person who owns or controls (directly or indirectly) a right to use land for pipfruit growing activity that is an interest in land described in section 12(a) (the relevant pipfruit growing right); and

(b) the area of the relevant pipfruit growing right is less than 1,000 hectares.

(3) To the extent that the transaction will result in the relevant pipfruit growing investment, it does not require consent in relation to the relevant pipfruit growing right.

(4) Subclause (1) or (3) (as the case may be) does not apply if, immediately after the relevant pipfruit growing investment is given effect to, the sum of the following area is 1,000 hectares or more:

(a) the area of the relevant pipfruit growing right:

(b) the combined area of all other pipfruit growing rights—

(i) that related pipfruit growing investors acquire in the same calendar year as that in which the relevant pipfruit growing investment is given effect to; and

(ii) that are for a term of 3 years or more (including rights of renewal, whether of the granter or the grantee).

(5) For the purposes of subclause 4(b)(i),—

(a) related pipfruit growing investor means—

(i) the person who makes the relevant pipfruit growing investment; or

(ii) any associate of that person; or

(iii) a body corporate related to that person or to any associate of that person (as determined in accordance with section 12(2) of the Financial Markets Conduct Act 2013); and

(b) a related pipfruit growing investor (B) is treated as acquiring a pipfruit growing right if—

(i) B acquires rights or interests in securities of a person (C) who owns or controls (directly or indirectly) the pipfruit growing right and, as a result of the acquisition, B has (either alone or together with B’s associates) a 25% or more ownership or control interest in C; or

(ii) the pipfruit growing right comes under the ownership or control (direct or indirect) of a person in whom B has (either alone or together with B’s associates) a 25% or more ownership or control interest; and

(c) it does not matter if a pipfruit growing right is acquired by a related pipfruit growing investor before the relevant pipfruit growing investment is given effect to.

(6) In this clause, area, in relation to a pipfruit growing right, means the area of land covered by the pipfruit growing right (including any right, whether of the grantor or grantee, to have the original area increased).

(7) In this clause a right to use land means a right that is covered by this Act but that is not ownership of the land.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of Simeon Brown to schedule 3 be agreed to:

In Schedule 3, new Schedule 3, after clause 8, insert:

Exemptions in respect of overseas investments in sensitive land involving manuka

8A Area of manuka activity less than 1,000 hectares

(1) A transaction does not require consent to the extent that it will result in an overseas investment in sensitive land (the relevant manuka investment) if—

(a) the relevant manuka investment is the acquisition of a right to use land for manuka activity (the relevant manuka right); and

(b) the area of the relevant manuka right is less than 1,000 hectares.

(2) Subclause (3) applies to a transaction that will result in an overseas investment in sensitive land (the relevant manuka investment) if—

(a) the relevant manuka investment is the acquisition of rights or interests in securities of a person who owns or controls (directly or indirectly) a right to use land for manuka activity that is an interest in land described in section 12(a) (the relevant manuka right); and

(b) the area of the relevant manuka right is less than 1,000 hectares.

(3) To the extent that the transaction will result in the relevant manuka investment, it does not require consent in relation to the relevant manuka right.

(4) Subclause (1) or (3) (as the case may be) does not apply if, immediately after the relevant manuka investment is given effect to, the sum of the following area is 1,000 hectares or more:

(a) the area of the relevant manuka right:

(b) the combined area of all other manuka rights—

(i) that related manuka investors acquire in the same calendar year as that in which the relevant manuka investment is given effect to; and

(ii) that are for a term of 3 years or more (including rights of renewal, whether of the granter or the grantee).

(5) For the purposes of subclause 4(b)(i),—

(a) related manuka investor means—

(i) the person who makes the relevant manuka investment; or

(ii) any associate of that person; or

(iii) a body corporate related to that person or to any associate of that person (as determined in accordance with section 12(2) of the Financial Markets Conduct Act 2013); and

(b) a related manuka investor (B) is treated as acquiring a manuka right if—

(i) B acquires rights or interests in securities of a person (C) who owns or controls (directly or indirectly) the manuka right and, as a result of the acquisition, B has (either alone or together with B’s associates) a 25% or more ownership or control interest in C; or

(ii) the manuka right comes under the ownership or control (direct or indirect) of a person in whom B has (either alone or together with B’s associates) a 25% or more ownership or control interest; and

(c) it does not matter if a manuka right is acquired by a related manuka investor before the relevant manuka investment is given effect to.

(6) In this clause, area, in relation to a manuka right, means the area of land covered by the manuka right (including any right, whether of the grantor or grantee, to have the original area increased).

A party vote was called for on the question, That the amendment be agreed to.

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Rt Hon David Carter to schedule 3 be agreed to:

In Schedule 3, new Schedule 3, after clause 8, insert:

Exemptions in respect of overseas investments in sensitive land involving horticulture

8A Area of horticulture activity less than 1,000 hectares

(1) A transaction does not require consent to the extent that it will result in an overseas investment in sensitive land (the relevant horticulture investment) if—

(a) the relevant horticulture investment is the acquisition of a right to use land for horticulture activity (the relevant horticulture right); and

(b) the area of the relevant horticulture right is less than 1,000 hectares.

(2) Subclause (3) applies to a transaction that will result in an overseas investment in sensitive land (the relevant horticulture investment) if—

(a) the relevant horticulture investment is the acquisition of rights or interests in securities of a person who owns or controls (directly or indirectly) a right to use land for horticulture activity that is an interest in land described in section 12(a) (the relevant horticulture right); and

(b) the area of the relevant horticulture right is less than 1,000 hectares.

(3) To the extent that the transaction will result in the relevant horticulture investment, it does not require consent in relation to the relevant horticulture right.

(4) Subclause (1) or (3) (as the case may be) does not apply if, immediately after the relevant horticulture investment is given effect to, the sum of the following area is 1,000 hectares or more:

(a) the area of the relevant horticulture right:

(b) the combined area of all other horticulture rights—

(i) that related horticulture investors acquire in the same calendar year as that in which the relevant horticulture investment is given effect to; and

(ii) that are for a term of 3 years or more (including rights of renewal, whether of the granter or the grantee).

(5) For the purposes of subclause 4(b)(i),—

(a) related horticulture investor means—

(i) the person who makes the relevant horticulture investment; or

(ii) any associate of that person; or

(iii) a body corporate related to that person or to any associate of that person (as determined in accordance with section 12(2) of the Financial Markets Conduct Act 2013); and

(b) a related horticulture investor (B) is treated as acquiring a horticulture right if—

(i) B acquires rights or interests in securities of a person (C) who owns or controls (directly or indirectly) the horticulture right and, as a result of the acquisition, B has (either alone or together with B’s associates) a 25% or more ownership or control interest in C; or

(ii) the horticulture right comes under the ownership or control (direct or indirect) of a person in whom B has (either alone or together with B’s associates) a 25% or more ownership or control interest; and

(c) it does not matter if a horticulture right is acquired by a related horticulture investor before the relevant horticulture investment is given effect to.

(6) In this clause, area, in relation to a horticulture right, means the area of land covered by the horticulture right (including any right, whether of the grantor or grantee, to have the original area increased).

(7) For the purposes of this clause a right to use land means a right that is covered by this Act but that is not ownership of the land.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of Dan Bidois to schedule 3 be agreed to:

In Schedule 3, new Schedule 3, after clause 8, insert:

Exemptions in respect of overseas investments in sensitive land involving tulips

8A Area of tulip activity less than 1,000 hectares

(1) A transaction does not require consent to the extent that it will result in an overseas investment in sensitive land (the relevant tulip investment) if—

(a) the relevant tulip investment is the acquisition of a right to use land for tulip activity (the relevant tulip right); and

(b) the area of the relevant tulip right is less than 1,000 hectares.

(2) Subclause (3) applies to a transaction that will result in an overseas investment in sensitive land (the relevant tulip investment) if—

(a) the relevant tulip investment is the acquisition of rights or interests in securities of a person who owns or controls (directly or indirectly) a right to use land for tulip activity that is an interest in land described in section 12(a) (the relevant tulip right); and

(b) the area of the relevant tulip right is less than 1,000 hectares.

(3) To the extent that the transaction will result in the relevant tulip investment, it does not require consent in relation to the relevant tulip right.

(4) Subclause (1) or (3) (as the case may be) does not apply if, immediately after the relevant tulip investment is given effect to, the sum of the following area is 1,000 hectares or more:

(a) the area of the relevant tulip right:

(b) the combined area of all other tulip rights—

(i) that related tulip investors acquire in the same calendar year as that in which the relevant tulip investment is given effect to; and

(ii) that are for a term of 3 years or more (including rights of renewal, whether of the granter or the grantee).

(5) For the purposes of subclause 4(b)(i),—

(a) related tulip investor means—

(i) the person who makes the relevant tulip investment; or

(ii) any associate of that person; or

(iii) a body corporate related to that person or to any associate of that person (as determined in accordance with section 12(2) of the Financial Markets Conduct Act 2013); and

(b) a related tulip investor (B) is treated as acquiring a tulip right if—

(i) B acquires rights or interests in securities of a person (C) who owns or controls (directly or indirectly) the tulip right and, as a result of the acquisition, B has (either alone or together with B’s associates) a 25% or more ownership or control interest in C; or

(ii) the tulip right comes under the ownership or control (direct or indirect) of a person in whom B has (either alone or together with B’s associates) a 25% or more ownership or control interest; and

(c) it does not matter if a tulip right is acquired by a related tulip investor before the relevant tulip investment is given effect to.

(6) In this clause, area, in relation to a tulip right, means the area of land covered by the tulip right (including any right, whether of the grantor or grantee, to have the original area increased).

A party vote was called for on the question, That the amendment be agreed to.

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of Simon O’Connor to schedule 3 be agreed to:

In Schedule 3, new Schedule 3, after clause 8, insert:

Exemptions in respect of overseas investments in sensitive land involving almonds

8A Area of almond activity less than 1,000 hectares

(1) A transaction does not require consent to the extent that it will result in an overseas investment in sensitive land (the relevant almond investment) if—

(a) the relevant almond investment is the acquisition of a right to use land for almond activity (the relevant almond right); and

(b) the area of the relevant almond right is less than 1,000 hectares.

(2) Subclause (3) applies to a transaction that will result in an overseas investment in sensitive land (the relevant almond investment) if—

(a) the relevant almond investment is the acquisition of rights or interests in securities of a person who owns or controls (directly or indirectly) a right to use land for almond activity that is an interest in land described in section 12(a) (the relevant almond right); and

(b) the area of the relevant almond right is less than 1,000 hectares.

(3) To the extent that the transaction will result in the relevant almond investment, it does not require consent in relation to the relevant almond right.

(4) Subclause (1) or (3) (as the case may be) does not apply if, immediately after the relevant almond investment is given effect to, the sum of the following area is 1,000 hectares or more:

(a) the area of the relevant almond right:

(b) the combined area of all other almond rights—

(i) that related almond investors acquire in the same calendar year as that in which the relevant almond investment is given effect to; and

(ii) that are for a term of 3 years or more (including rights of renewal, whether of the granter or the grantee).

(5) For the purposes of subclause 4(b)(i),—

(a) related almond investor means—

(i) the person who makes the relevant almond investment; or

(ii) any associate of that person; or

(iii) a body corporate related to that person or to any associate of that person (as determined in accordance with section 12(2) of the Financial Markets Conduct Act 2013); and

(b) a related almond investor (B) is treated as acquiring a almond right if—

(i) B acquires rights or interests in securities of a person (C) who owns or controls (directly or indirectly) the almond right and, as a result of the acquisition, B has (either alone or together with B’s associates) a 25% or more ownership or control interest in C; or

(ii) the almond right comes under the ownership or control (direct or indirect) of a person in whom B has (either alone or together with B’s associates) a 25% or more ownership or control interest; and

(c) it does not matter if an almond right is acquired by a related almond investor before the relevant almond investment is given effect to.

(6) In this clause, area, in relation to an almond right, means the area of land covered by the almond right (including any right, whether of the grantor or grantee, to have the original area increased).

A party vote was called for on the question, That the amendment be agreed to.

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of Tim van de Molen to schedule 3 be agreed to:

In Schedule 3, new Schedule 3, after clause 8, insert:

Exemptions in respect of overseas investments in sensitive land involving maize

8A Area of maize activity less than 1,000 hectares

(1) A transaction does not require consent to the extent that it will result in an overseas investment in sensitive land (the relevant maize investment) if—

(a) the relevant maize investment is the acquisition of a right to use land for maize activity (the relevant maize right); and

(b) the area of the relevant maize right is less than 1,000 hectares.

(2) Subclause (3) applies to a transaction that will result in an overseas investment in sensitive land (the relevant maize investment) if—

(a) the relevant maize investment is the acquisition of rights or interests in securities of a person who owns or controls (directly or indirectly) a right to use land for maize activity that is an interest in land described in section 12(a) (the relevant maize right); and

(b) the area of the relevant maize right is less than 1,000 hectares.

(3) To the extent that the transaction will result in the relevant maize investment, it does not require consent in relation to the relevant maize right.

(4) Subclause (1) or (3) (as the case may be) does not apply if, immediately after the relevant maize investment is given effect to, the sum of the following area is 1,000 hectares or more:

(a) the area of the relevant maize right:

(b) the combined area of all other maize rights—

(i) that related maize investors acquire in the same calendar year as that in which the relevant maize investment is given effect to; and

(ii) that are for a term of 3 years or more (including rights of renewal, whether of the granter or the grantee).

(5) For the purposes of subclause 4(b)(i),—

(a) related maize investor means—

(i) the person who makes the relevant maize investment; or

(ii) any associate of that person; or

(iii) a body corporate related to that person or to any associate of that person (as determined in accordance with section 12(2) of the Financial Markets Conduct Act 2013); and

(b) a related maize investor (B) is treated as acquiring a maize right if—

(i) B acquires rights or interests in securities of a person (C) who owns or controls (directly or indirectly) the maize right and, as a result of the acquisition, B has (either alone or together with B’s associates) a 25% or more ownership or control interest in C; or

(ii) the maize right comes under the ownership or control (direct or indirect) of a person in whom B has (either alone or together with B’s associates) a 25% or more ownership or control interest; and

(c) it does not matter if a maize right is acquired by a related maize investor before the relevant maize investment is given effect to.

(6) In this clause, area, in relation to a maize right, means the area of land covered by the maize right (including any right, whether of the grantor or grantee, to have the original area increased).

A party vote was called for on the question, That the amendment be agreed to.

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of Andrew Bayly to schedule 3 be agreed to:

In Schedule 3, new Schedule 3, after clause 8, insert:

Exemptions in respect of overseas investments in sensitive land involving hemp

8A Area of hemp activity less than 1,000 hectares

(1) A transaction does not require consent to the extent that it will result in an overseas investment in sensitive land (the relevant hemp investment) if—

(a) the relevant hemp investment is the acquisition of a right to use land for hemp activity (the relevant hemp right); and

(b) the area of the relevant hemp right is less than 1,000 hectares.

(2) Subclause (3) applies to a transaction that will result in an overseas investment in sensitive land (the relevant hemp investment) if—

(a) the relevant hemp investment is the acquisition of rights or interests in securities of a person who owns or controls (directly or indirectly) a right to use land for hemp activity that is an interest in land described in section 12(a) (the relevant hemp right); and

(b) the area of the relevant hemp right is less than 1,000 hectares

(3) To the extent that the transaction will result in the relevant hemp investment, it does not require consent in relation to the relevant hemp right.

(4) Subclause (1) or (3) (as the case may be) does not apply if, immediately after the relevant hemp investment is given effect to, the sum of the following area is 1,000 hectares or more:

(a) the area of the relevant hemp right:

(b) the combined area of all other hemp rights—

(i) that related hemp investors acquire in the same calendar year as that in which the relevant hemp investment is given effect to; and

(ii) that are for a term of 3 years or more (including rights of renewal, whether of the granter or the grantee).

(5) For the purposes of subclause 4(b)(i),—

(a) related hemp investor means—

(i) the person who makes the relevant hemp investment; or

(ii) any associate of that person; or

(iii) a body corporate related to that person or to any associate of that person (as determined in accordance with section 12(2) of the Financial Markets Conduct Act 2013); and

(b) a related hemp investor (B) is treated as acquiring a hemp right if—

(i) B acquires rights or interests in securities of a person (C) who owns or controls (directly or indirectly) the hemp right and, as a result of the acquisition, B has (either alone or together with B’s associates) a 25% or more ownership or control interest in C; or

(ii) the hemp right comes under the ownership or control (direct or indirect) of a person in whom B has (either alone or together with B’s associates) a 25% or more ownership or control interest; and

(c) it does not matter if a hemp right is acquired by a related hemp investor before the relevant hemp investment is given effect to.

(6) In this clause, area, in relation to a hemp right, means the area of land covered by the hemp right (including any right, whether of the grantor or grantee, to have the original area increased).

A party vote was called for on the question, That the amendment be agreed to.

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon David Bennett to schedule 3 be agreed to:

In Schedule 3, new Schedule 3, after clause 8, insert:

Exemptions in respect of overseas investments in sensitive land involving equine bloodstock

8A Area of equine bloodstock activity less than 1,000 hectares

(1) A transaction does not require consent to the extent that it will result in an overseas investment in sensitive land (the relevant equine bloodstock investment) if—

(a) the relevant equine bloodstock investment is the acquisition of a right to use land for equine bloodstock activity (the relevant equine bloodstock right); and

(b) the area of the relevant equine bloodstock right is less than 1,000 hectares.

(2) Subclause (3) applies to a transaction that will result in an overseas investment in sensitive land (the relevant equine bloodstock investment) if—

(a) the relevant equine bloodstock investment is the acquisition of rights or interests in securities of a person who owns or controls (directly or indirectly) a right to use land for equine bloodstock activity that is an interest in land described in section 12(a) (the relevant equine bloodstock right); and

(b) the area of the relevant equine bloodstock right is less than 1,000 hectares.

(3) To the extent that the transaction will result in the relevant equine bloodstock investment, it does not require consent in relation to the relevant equine bloodstock right.

(4) Subclause (1) or (3) (as the case may be) does not apply if, immediately after the relevant equine bloodstock investment is given effect to, the sum of the following area is 1,000 hectares or more:

(a) the area of the relevant equine bloodstock right:

(b) the combined area of all other equine bloodstock rights—

(i) that related equine bloodstock investors acquire in the same calendar year as that in which the relevant equine bloodstock investment is given effect to; and

(ii) that are for a term of 3 years or more (including rights of renewal, whether of the granter or the grantee).

(5) For the purposes of subclause 4(b)(i),—

(a) related equine bloodstock investor means—

(i) the person who makes the relevant equine bloodstock investment; or

(ii) any associate of that person; or

(iii) a body corporate related to that person or to any associate of that person (as determined in accordance with section 12(2) of the Financial Markets Conduct Act 2013); and

(b) a related equine bloodstock investor (B) is treated as acquiring an equine bloodstock right if—

(i) B acquires rights or interests in securities of a person (C) who owns or controls (directly or indirectly) the equine bloodstock right and, as a result of the acquisition, B has (either alone or together with B’s associates) a 25% or more ownership or control interest in C; or

(ii) the equine bloodstock right comes under the ownership or control (direct or indirect) of a person in whom B has (either alone or together with B’s associates) a 25% or more ownership or control interest; and

(c) it does not matter if an equine bloodstock right is acquired by a related equine bloodstock investor before the relevant equine bloodstock investment is given effect to.

(6) In this clause, area, in relation to an equine bloodstock right, means the area of land covered by the equine bloodstock right (including any right, whether of the grantor or grantee, to have the original area increased).

A party vote was called for on the question, That the amendment be agreed to.

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

CHAIRPERSON (Hon Anne Tolley): Members, it appears that the will of the committee is to not agree to such amendments. Therefore, I will not put the rest of those amendments to the vote—that is, the amendments from the Hon Nathan Guy, the Hon Alfred Ngaro, Chris Penk, Todd Muller, Melissa Lee, the Hon Judith Collins, Matt King, Simon O’Connor, Dr Jian Yang, Simeon Brown, Maureen Pugh, the Hon Louise Upston, the Hon Jacqui Dean, Lawrence Yule, Dan Bidois, the Hon Gerry Brownlee, Simon O’Connor, Jonathan Young, Tim van de Molen, Matt Doocey, Denise Lee, Melissa Lee, Hamish Walker, Paul Goldsmith, Andrew Bayly, and Hon David Bennett. We will move on.

A party vote was called for on the question, That schedule 3 as amended be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 57

New Zealand National 56; ACT New Zealand 1.

Schedule 3 as amended agreed to.

Schedule 4

The question was put that the amendment set out on Supplementary Order Paper 52 in the name of the Hon David Parker to schedule 4 be agreed to.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 57

New Zealand National 56; ACT New Zealand 1.

Amendment agreed to.

A party vote was called for on the question, That schedule 4 as amended be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 57

New Zealand National 56; ACT New Zealand 1.

Schedule 4 as amended agreed to.

Schedule 5

The question was put that the amendments set out on Supplementary Order Paper 52 in the name of the Hon David Parker to schedule 5 be agreed to.

A party vote was called for on the question, That the amendments be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 56

New Zealand National 56.

Amendments agreed to.

A party vote was called for on the question, That schedule 5 as amended be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 57

New Zealand National 56; ACT New Zealand 1.

Schedule 5 as amended agreed to.

Clauses 1 to 3

Hon AMY ADAMS (National—Selwyn): Thank you, Madam Chair. We, obviously, now come to the point of the debate where we debate the title and commencement clause. In this area, there are a number of matters that I want to raise in respect of both the title and commencement. The first, obviously, is to do with the title of the legislation. The bill is named, somewhat innocuously looking on its face, the Overseas Investment Amendment Bill, which all sounds very dry and worthy, but in actual fact what we have heard through the course of this debate as it has progressed over the course of now several weeks is that, actually, this is a bill that is going to rip the guts out of the housing sector, see less houses built, and completely devastate the ability of those in the primary sector to use profit à prendre in anything except the Government’s chosen sector of forestry, where they obviously are quite happy to have overseas money pour in.

My question to this committee then is, shouldn’t the bill really be named something that is far clearer about the effect that it’s going to have on the economy? I would suggest that, in fact, a title along the lines of “Stopping Foreign Investment in the Sectors the Government Doesn’t Like (But Making it a Whole Lot Easier in the Bits that They Do Like) Amendment Bill” might be quite a good one. It would at least tell people looking through the legislation exactly what the bill does. Perhaps it could be called “A Dog’s Breakfast of a Bill Because the Work Wasn’t Done (Had to be Patched Up at Select Committee and then Again by Numerous Supplementary Order Papers from the Government) Overseas Investment Bill”, which would also tell the public a lot more about the legislation. Or in fact we could go on to say, “The Bill that Says it is Going to Make Things a Lot Harder (When in Actual Fact Making so Many Rules that Leave so Many Doors Open for Foreigners to Come Through in a Myriad of Different Ways Because the Government Didn’t Put the Time in to Getting It Right) Amendment Bill”. I think any of those might tell a much clearer story about what’s actually going on in this legislation.

Here’s the real tragedy: the bill that was promoted to New Zealand as being one that was going to help with housing affordability will do nothing about housing affordability. In fact, the submissions to the Finance and Expenditure Committee were that it was going to make the problem worse. So how about “The Bill that Actually Does the Opposite of What the Government Said It Would Do Bill”? I think that would be a pretty good title for this legislation, because when you name a bill, it should bear some semblance of relation to what the content of the bill does.

What we’ve seen through this debate is a poorly conceived, poorly designed, rushed piece of legislation that even the officials had to admit on several occasions had been done under time pressure without the ability to work through some of the stuff. On much of it, all they could say to the select committee was, “Well, we’re going to work through all of that. We’re not quite sure yet.” When the select committee asked, for example, some reasonably basic questions about the economic rationale or the policy assumptions that led to some of the conclusions, all we were told was, “Well, we’re doing it because that’s what the Government said it wants.” So perhaps the bill then should be called “Not Good Policy Process (But What the Government Said in their Manifesto so They’re Going to Do It Now Whether It Makes Sense or Not) Bill”. I think that might be quite a good title for the legislation.

The other part, of course, of what we are debating now is the commencement clause. This commencement clause sees a rushed process rushed further. I know my colleague from Clutha-Southland has real concerns about the fact that the work hasn’t been done to understand exactly what the impact of this bill will be on places like Queenstown, that he represents. I know he has a Supplementary Order Paper that he will want to debate that talks very carefully about how he could ensure the commencement is adjusted to ensure that at the very least the Government takes the time to understand the impact.

I wouldn’t have thought asking a Government to understand the impact of its legislation in the very area that it said it was concerned about, which is the housing market, would be a big deal. But no, it seems that the rush to be able to tick another box on the to-do list over-weighs the importance of actually getting the legislation right—working out whether it’s applicable, working out how it applies, more particularly, and ensuring that they understand the impact. All of those seem to go by the wayside, and what we’ve got here is a process of just get it passed so that David Parker can point to having done it—never mind that it will do nothing whatsoever to help house prices in New Zealand. It will make it worse. It will make the dealing of land in this space worse. It’s a bad bill.

STUART SMITH (National—Kaikōura): Thank you, Mr Chair, a wise choice. I want to talk about the title clause of this bill. I think the Hon Amy Adams had some very good suggestions there. I think “The Overseas Carve-Out Investment Bill” would be a better name. What I can’t understand about this bill is why we’d have a carve-out for forestry around profit à prendre, when we don’t have the same thing—on up to 1,000 hectares there are no Overseas Investment Act requirements to go through, other than a tick-box exercise—offered to something like the wine industry, which actually uses profit à prendre up to now.

Foreign-owned wine companies actually have access to New Zealand land without owning it, and what they tell me is this bill will ensure that they go through a process to buy the land now rather than going through the quite difficult process—when you’re doing that process to get a profit à prendre, you might as well own the land, and that’s what they’ll do. That is what they’ll do. So this is having quite a perverse outcome. These carve-outs don’t make any sense at all to me. I note that in the Finance and Expenditure Committee when I asked the Hon Eugenie Sage about this—you know, why we are doing this headlong rush to plant forestry? I said at that time that the people in Tolaga Bay might not think it was such a great idea. She said, “No, don’t worry. We’re not going to allow planting on steep land.” So what that means is this carve-out in the bill is going to ensure that forestry will be planted on New Zealand’s best land. And, in the words of Ian Proudfoot, as I said earlier, “The last thing we want out of this is another Central North Island forest, because it kills rural communities.” That may be New Zealand First’s end game. I don’t know what their end game is, but that is a really bad policy—extremely bad.

Forestry’s already 72 percent foreign-owned, and in the wine industry, what we found is that foreign investment has led to further vertical integration from the vineyard floor right through to the end seller in the market, which has a huge influence on the ability for New Zealand to gain more share up the value chain than would otherwise be the case. What do we see in forestry? Seventy-two percent foreign-owned, Mr Parker, 72 percent foreign-owned, and yet we see huge stacks of raw logs on all of our export ports on the wharves waiting to go overseas. They are not processed. So we are seeing a failure there. Quite clearly, that carve-out is not going to be helpful for extracting more value here in New Zealand.

Now, the stated purpose that’s been bandied about quite frequently is to try and actually lower the house prices here in New Zealand. But, if I could use a forestry analogy, you’re playing with fire doing this because, effectively, you’re trying to undertake microsurgery with a chainsaw. You’re having a very large potential impact, and if you start to get the market going down, it’s very difficult to stop it. Then we’ll end up with a whole lot of people—particularly in Auckland—with negative equity. Then we’ll have—as Mr Bayly my colleague will know—quite concerned banks and, in fact, we’d have Adrian—

Andrew Bayly: And what about the homeowners?

STUART SMITH: Well, the homeowners are going to be in serious trouble, as you well know. Then we’ll see a rush to the door and it will cause a further spiral downwards in house prices. Then we’ll see the Reserve Bank Governor, Adrian Orr, wondering what to do. How useful were those stress tests that he has undertaken? I suspect not very, when things start to go down at the rate that they will when you start taking such a really blunt instrument to try and deal with a market that you shouldn’t be meddling in in the first place.

In summary, I think the name of this bill is not adequate. It doesn’t cover the consequences that will come out of this bill. I think it would be far better called the “Overseas Carve-Out Investment Amendment Bill”—it’d be far more appropriate.

ANDREW BAYLY (National—Hunua): Thank you, Mr Chair. It’s a pleasure to be talking on this debate. I just think it’s very, very disappointing that the Labour - New Zealand First - Greens coalition Government—call it what you may; the members over that side—have not taken the opportunity to talk to this good robust debate tonight about the Overseas Investment Amendment Bill. I just think it’s really disappointing. Those people watching from home, I think, will look at this and wonder why, as I do. All they want to do is close down this debate. I think that is wrong, because this is one of the most significant pieces of legislation that’s going to pass this House this year. Of course, it is going to have a detrimental effect, not only on those house owners and landowners, those vineyard operators that we’ve heard about, forestry owners, but on New Zealand in general. We’re already seeing the impacts of that. It is one of the reasons why we’re seeing a decline in economic growth.

Just returning back to clauses 1, 2, and 3, which I know, Mr Chair, that you’re eagerly focused on, the thing about this bill is—normally, it’s very simple about a commencement date. Normally, the wording is very simple; simply along the lines that it will come into force immediately upon being signed by Royal assent by the Governor-General, in effect. That, of course, is how legislation mostly comes into effect. But if you look at clause 2 of this bill, everything about it is complicated. Clause 2 is symptomatic of it. I just find it fascinating. Clause 2(1) states, “this Act comes into force on the date appointed by the Governor-General by Order in Council, and 1 or more orders may be made bringing different provisions into force on different dates and appointing different dates for different purposes.” Ha, Ha! I really struggle with that. Hey, but that’s only one. That’s clause 2(1). Let me move on rapidly to clause 2(2). I know Mr O’Connor there is eagerly waiting to hear.

Simon O’Connor: That’s right. Be still, my beating heart!

ANDREW BAYLY: Ha, ha! It states, “To the extent that it is not earlier brought into force, this Act comes into force immediately after the expiry of the 2-month period that starts on the date of Royal assent.” Well, I’m boggling, because how do you interpose subsections (1) and (2)? I’m certain listeners at home will be wondering how that works. But that is not all. This bill gives more to the debate: clause 2(3) “In this section, provision includes any item, or any part of an item, in any of the schedules.”

Simeon Brown: Are you part of an item?

ANDREW BAYLY: My wife believes I’m part of an item.

Mr Chair, I’ve got to put to you that that is one of the most complicated commencement clauses I’ve seen in a bill for so long. I can’t understand it. In fact, I really don’t understand it. And when you overlay that with a fourth dimension, which is the issue around regulations—those wonderful things that Mr Parker and I shared an experience on in the Regulations Review Committee; those “Henry VIII” clauses; those disallowable instruments; the regulation powers for the Minister to be able to, in effect, have wide-ranging powers to make changes and bring them in on dates that he or she so determined—I think that this bill and this commencement are symptomatic, as I said before, of a very complicated bill.

I think, if I was to look at Mr Parker directly, all of those years we spent on the Regulations Review Committee talking about limiting the regulation powers of the Minister to make sure they were carefully defined and confined—I do not believe that this bill actually provides for that. In fact, it gives wide auspices to the Minister, whether he or she in the future has the opportunity to do this.

But even if you go right to the back of this very last page, what do you see? Schedule 5, clauses 2 and 3—all about regulation powers and how they’ve been amended in the Overseas Investment Regulations. I think this part of this bill is the bit that worries me the most, because I think we should have worked this out before we rapidly and hurriedly pass this bill through this House.

Hamish Walker: Madam Speaker.

Hon Ruth Dyson: Mr.

Hamish Walker: Mr Speaker.

CHAIRPERSON (Adrian Rurawhe): I call Hamish Walker.

Hon Members: Mr Chair.

HAMISH WALKER (National—Clutha-Southland): Mr Chair—I’ll make a note. Newbie—excuse that. I just want to discuss the name of this bill—very, very interesting. I want to acknowledge the Minister there, and I’ll get back to Minister Parker later on, but I just thought of—just making a few notes here of possible names for this bill. We could rename it from the Overseas Investment Amendment Bill to the “Twenty-Three Submitters That Came Up from Queenstown: We Do Not Care about Your Opinion Bill”—who submitted to the Finance and Expenditure Committee. We could also name it the “All Opposed, 23 Submitters from Queenstown That Came to the Select Committee Bill”. We could rename it the “Exception for Queenstown over $2.5 Million Bill”, as many submitters called for. We could also call it the “Similar to Every Other Economic Indicator Bill”, where the Government doesn’t seem to care about business confidence going out the wall—“We’re not going to listen on this or the 23 submitters from Queenstown.” We could also call it the “Queenstown Lakes District Council, We Aren’t Going to Read Your Submission Bill”. The council submitted on this, and they said “Please, just wait. Wait for the evidence, because you clearly don’t have it.”

The Mayoral Housing Affordability Taskforce was set up in early 2017, and they’ve been doing a great job in housing affordability. They actually submitted on this bill—one of the 23 submitters from Queenstown—and they said, “Please, Minister, just wait. Wait for the evidence to come through.” You could also call it the “Kill the Golden Goose in the Niche Luxury Market Bill”. We had one submitter; he has a construction company with 30-odd employees servicing the high-end market. In his submission, he said, basically, if this bill goes through, a lot of his workers will go offshore because they won’t have the opportunity to build these luxury homes or to learn from him.

Other names you could call it would be “Kill the Service to the Luxury Property Market Bill”, which has over 100 people working—

Simeon Brown: Kill the bill—kill the bill.

HAMISH WALKER: Just “Kill the Queenstown Economy Bill”. Another name was actually raised with me on Monday and last Friday: the “David Parker Gone Loose Bill”, as David used to be the local member for Queenstown back in the day—and I appreciate your comments earlier on, Minister, in Dunedin Airport. Very valid, but, I mean, what would someone like Howard Paterson, who you did a lot of work for, think of this bill, Minister? Some other names could be the “No Donations to Queenstown Bill”. Take, for example, one buyer who bought five farms between Queenstown and Wānaka—$60 million. He then spent $50 million to get the farms to a state where they used to be, and then he donated 90 percent of those farms back to the Crown through the Queen Elizabeth the Second National Trust; therefore, all New Zealanders get to have access to these. He also spends between $3 million and $5 million per year servicing this.

We could also call this bill the “No Americans Allowed Bill”. Take the American couple at Camp Glenorchy. They’ve spent $40 million developing the first carbon-zero accommodation camp in the world, and it just so happens that they’ve donated all the profits—all the profits—back to the community. We could call it the “No Affordable Housing Specialist Bill”. As many submitters from Queenstown said, this won’t make housing affordability any better; it’s actually going to make it worse, because do you meet many first-home buyers who spend $5 million to $10 million on their first home? Well, I don’t. Or one gentleman who was the chair of the Queenstown housing affordability trust for nine years. He’s currently on a New Zealand-wide housing trust. He also mentioned that this is not going to make housing affordability any better.

We could also call it the “We Don’t Respect the Select Committee Process Bill”, as every single submitter to the select committee from Queenstown opposed this bill—every single one—which is a shame, because on select committees you often get some really good work through diversity of thought from the different parties. You could call it the “Purchaser in China Sets Up a Company in Singapore to Buy Property in New Zealand Bill”, or you could call it the “Loophole Bill”.

This bill, quite clearly, judging by the submissions from Queenstown, is a dog, and I encourage the Minister to look at some of the amendments.

Hon RUTH DYSON (Labour—Port Hills): I move, That the question be now put.

LAWRENCE YULE (National—Tukituki): I wish to take a brief call on the title and the commencement. First of all, a number of titles have been suggested, but, actually, in the Minister’s own words, the reason for this bill is to ban foreign housebuyers, so it should actually be called the “Ban Foreign Housebuyer Bill”, in my view. I think that more aptly describes what this bill seeks to do. Having sat on the select committee from the beginning, it soon became apparent that there were all sorts of other things caught up in this complicated bill which have since been amended—many of them have—and we’ve even seen amendments submitted this evening on the regulating side of the bill.

I think what I really want to talk to, though, is the more substantive part, about the commencement date. When we started this decision-making process and this bill was introduced to the House, it was done with some urgency by this Government, because this Government had found a way, it said, to deal with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) negotiations, and it had found a way of carving out its concern about foreign housebuyers and bringing it through this House. That was done with some urgency, including a very limited time for submissions and including a rather rushed process, which was then amended a number of times.

So I come to the point, which is around the commencement date. As my learned friend Mr Bayly has just said, the commencement date provisions are quite complicated, and I’m actually asking the Minister to explain to the committee why those commencement date scenarios are listed in the way they are. If this Government is so keen on bringing this bill through, despite widespread opposition from submitters—as Mr Walker has just said—and despite opposition from this side of the committee, why does the Minister not simply have a simple clause that said “10 days after Royal assent” or something to that effect? I genuinely don’t understand, Minister, the reason for that and why that might benefit New Zealand; the reason as to why you have brought in a series of provisions that can be brought in over different times, as opposed to what is normally a very simple clause.

So I think the name needs to better represent both exactly what this bill seeks to do and what politically motivated this coalition Government to bring in a piece of legislation like this. Then, more simply, at the end, if you are so keen about doing it and it was part of your election manifesto, why don’t you bring it in as quickly as you possibly can through this parliamentary process? Now, if there are things about the CPTPP that we don’t understand, that require these provisions to be put in, I encourage the Minister to take a call and tell this Parliament why that is the case. It’s not obvious to me and it wasn’t obvious to my colleague Mr Bayly, who questioned it.

I actually think this House deserves to know what the complexity is that means that parts of this bill will come in at certain times to be determined by Order in Council at some future time, when actually when we started this process it was a mad rush, it needed to be done as soon as possible, and it was one of the top 100-day priorities of this Government. It then became more complicated, and more submissions brought in a whole lot of other issues that the Finance and Expenditure Committee worked hard on over a significantly compressed time frame.

So I actually ask the Minister, as we come to the end of this debating round, could he explain to the committee and the members here why the commencement date is as it is, and why it needs to be like that when it could actually simply say what is traditionally the case, which is that it comes in 10 days after gaining Royal assent? Thank you, Mr Chair.

A party vote was called for on the question, That clause 1 be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 57

New Zealand National 56; ACT New Zealand.

Clause 1 agreed to.

The question was put that the amendments to clause 2 set out on Supplementary Order Paper 75 in the name of the Hon David Parker to the proposed amendments set out on Supplementary Order Paper 52 in his name be agreed to.

A party vote was called for on the question, That the amendment to the amendments be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 56

New Zealand National 56.

Amendment to the amendments agreed to.

The question was put that the amendments as amended set out on Supplementary Order Paper 52 in the name of the Hon David Parker to clause 2 be agreed to.

A party vote was called for on the question, That the amendments be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 56

New Zealand National 56.

Amendments agreed to.

The question was put that the following amendment in the name of the Hon Amy Adams to clause 2 be agreed to:

replace this clause with the following new clause:

2 Commencement

This Act comes into effect on the date that is 12 months after the date on which it receives Royal assent.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 56

New Zealand National 56.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Amendment not agreed to.

A party vote was called for on the question, That clause 2 as amended be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 57

New Zealand National 56; ACT New Zealand 1.

Clause 2 as amended agreed to.

A party vote was called for on the question, That clause 3 be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party 8.

Noes 57

New Zealand National 56; ACT New Zealand 1.

Clause 3 agreed to.

House resumed.

Bill reported with amendment.

Report adopted.

Bills

Tariff (PACER Plus) Amendment Bill

Second Reading

Hon DAVID PARKER (Minister for Trade and Export Growth): I rise to take a call on the second reading of the PACER-Plus legislation, and I welcome the opportunity to speak in—

DEPUTY SPEAKER: I’d appreciate it if you could move it.

Hon DAVID PARKER: I move that the motion be put.

DEPUTY SPEAKER: No, no. If you could move that the Tariff (PACER Plus) Amendment Bill be now read a second time, that would be helpful.

Hon DAVID PARKER: Thank you for the tolerance of members. I move, That the Tariff (PACER Plus) Amendment Bill be now read a second time.

DEPUTY SPEAKER: Thank you.

Hon DAVID PARKER: I welcome the opportunity to speak in support of that motion. As members of the House will be aware, the global trading environment’s becoming very challenging—more and more challenging by the day for small countries, small countries like ours, and it’s especially true for even smaller countries such as those in the Pacific. I think all members in the House would agree that a stable and prosperous Pacific is also a more secure Pacific, and that New Zealand has a role to play in achieving that.

When the Prime Minister visited Tonga earlier this year, it was sobering to be reminded that when Pacific Island countries are hit by a major cyclone, it can literally wipe out a third of their gross domestic product—a third. It’s an astounding number, and, of course, an effect that big has knock-on effects for the years that follow. This Government’s taking steps to rebalance our focus on our support for the Pacific: firstly, by taking more steps to mitigate the impacts of climate change; secondly, by helping Pacific countries meet their significant adaptation challenges; and, thirdly, through trade. And, of course, PACER-Plus has a role to play in boosting the economic resilience of the region, through, in part, trade.

At its core, PACER-Plus aims to build resilience through expanding trade opportunities, boosting investment, and facilitating private sector growth to create jobs. As some members will be aware, we’ve recently announced our Trade For All Agenda, which looks at how we can use trade policy to contribute to the addressing of global and regional issues of concern, and we’ll be asking New Zealanders to think about how trade can support sustainable economic development while taking into account the impact on the environment, and how we can have inclusive development of the New Zealand economy that supports all New Zealanders and all regions to benefit from trade, including women, Māori, and people in small to medium sized enterprises. In many ways, PACER-Plus shows that our Pacific neighbours want to pursue the same kinds of outcomes. They want sustainable economic development and they want as many people as possible to benefit.

It’s gratifying to see that in the House today there’s widespread support for ratifying PACER-Plus and passing the bill. I must say, I find it somewhat sad that critics here and abroad are still scaremongering that PACER-Plus is about driving down Pacific Island revenue sources through tariff liberalisation, or about New Zealand selling more goods to the Pacific. I believe it’s patronising to think that Pacific Island countries couldn’t negotiate an agreement of benefit to themselves. It’s just wrong to suggest that they would be signing up if they didn’t think it was going to benefit them. They signed because they believe it struck the right balance for them—the balance for them between their right to regulate for the public good and incentivising more trade in goods and services for the benefit of their economies. They signed PACER-Plus because they think it strikes the right balance between preserving traditional land tenure and signalling they want to attract more investment.

The Pacific reset that the Minister of Foreign Affairs announced earlier also requires a fresh approach to building the deeper partnerships that we want with Pacific Island countries. When we implement PACER-Plus, we’ll be applying the principles of the reset: understanding, friendship, mutual benefit, collective ambition, and sustainability. With its development focus, PACER-Plus will help. Through the tools and the financial assistance it provides to partner countries, PACER-Plus can help New Zealand address the economic and social outcomes that we want and the challenges that the Pacific region faces.

Work is already under way to ensure that when PACER-Plus does enter into force, Pacific countries are already positioned to benefit. Customs training is well advanced. Legislative reviews are complete. Work is about to get under way to create a suite of online tools that will increase the ease of doing business in the Pacific. Officials are looking at how we can use existing sustainable economic development programmes to better support PACER-Plus. In addition, thanks to the 30 percent in official development assistance—a 30 percent boost to official development assistance; it’s worth repeating that—which was announced by Minister Peters in 2018, the portion of New Zealand’s aid that goes to trade initiatives can also target new funding.

Eight ratifications are needed to bring PACER-Plus into force. It’s right that New Zealand is one of the first to ratify, as a sign of our genuine and longstanding commitment to the Pacific. In March, at an earlier reading, I explained to the House why PACER-Plus wasn’t typical of our other trade agreements, given its focus on the needs and aspirations of our trading partners in the Pacific. So whilst it’s not as liberalising as a lot of our trade agreements, it still presents some opportunities for New Zealand businesses to boost their own commercial ties into the Pacific while they help boost Pacific productivity. They’re going to be developing ventures that will benefit both New Zealand and the Pacific.

We do want to encourage more New Zealand investment into the Pacific. We want to see more Māori and New Zealand Pasifika businesses trading in the Pacific region. We’ve got the opportunity to increase the use of business models and ethics which reflect the common whakapapa that New Zealand shares with the Pacific—business models and ethics that will help Pacific countries chart a development pathway that best suits their values and aspirations.

Labour is also a catalyst for economic resilience, and the New Zealand Recognised Seasonal Employer scheme is globally recognised as the best of its kind. It was actually originally introduced by the last Labour Government, quite some time ago, and it benefits both Pacific countries and New Zealand. New Zealand has the enormous benefit of access to reliable and efficient workers in horticulture and viticulture industries to meet seasonal peaks in demand that we just can’t do from New Zealand’s labour market, but these workers also benefit themselves. They send remittances home, they take money home when they leave to return to their country of origin, and they also obtain skills which help them contribute to their home economy. I know that New Zealand has an ambition to lift the capability of the Pacific countries who send their people here to work and who return home with new skills.

PACER-Plus allows us to go further in helping Pacific Island workers use their time in New Zealand to build up the funds, training, and contacts that will make them more successful and entrepreneurs when they return home. We’ve already seen pilot schemes for construction and fisheries successfully roll out, and these schemes help fill vacancies when New Zealanders aren’t available. There’s going to be more discussion of this in the Solomon Islands, when a labour mobility conference will be held, where all PACER-Plus countries will be present.

The Pacific Islands Forum leaders launched PACER-Plus negotiations back in 2009, with the intent of increasing regional economic integration and boosting trade capacity in the region. It hasn’t been a straightforward journey. I would like to see all Pacific Islands Forum members join PACER-Plus, but we must acknowledge that this is a decision for each country to take, and we respect those decisions. The majority of the forum membership has decided to join PACER-Plus because it’s in their national interests. We hope others will join, too. For now, the sooner PACER-Plus enters into force, the sooner PACER-Plus can be implemented in a way that realises its potential as a catalyst for sustainable economic growth in the Pacific. I commend this motion to the House.

SIMON O’CONNOR (National—Tāmaki): Thank you, Mr Assistant Speaker. I’m pleased, as the chair of the Foreign Affairs, Defence and Trade Committee, to address this amendment bill in its second reading and to acknowledge, first and foremost, Minister David Parker’s speech to the House. I think that while I will, obviously, speak to it, as with other colleagues, I thought it was a very good summation of what the bill is attempting to achieve and the purposes of free trade in New Zealand and across the Pacific.

It’ll be no surprise to the House that National supports this bill. We have always been strong and vocal proponents of free trade. As I’ve acknowledged—I suppose in this role, but just as an MP—we have, unfortunately, particularly in the previous Parliament, gone through a period where the bipartisan approach to trade was not occurring, as this Government, actually, along with other agreements such as the TPP, was also championing the likes of PACER-Plus. But I’m really pleased to see that the new Government’s now on board.

Look, we are debating, obviously, the second reading. This is a bill that has returned from the select committee, and if I could, to start—well, somewhat start, seeing I’m already about a minute in—thank the members of the select committee for their work on this amendment bill and that organisation—only one organisation—that presented to the committee. So I think a little bit of context may be needed around that.

Look, fundamentally, PACER-Plus is a free-trade agreement into the Pacific Islands. As you might anticipate, “PACER-Plus” is an acronym, and it’s for the “Pacific Agreement on Closer Economic Relations Plus”. It involves, currently, 11 countries: obviously, the Realm of New Zealand, but working with Australia, the Cook Islands, Kiribati, Nauru, Niue, Samoa, the Solomon Islands, Tonga, Tuvalu, and Vanuatu.

Importantly, there are other countries in the wing that are looking to come on board—the likes of Fiji, Papua New Guinea, the Federated States of Micronesia, Palau, and the Marshall Islands. I won’t go through all the particular reasons why those countries have not yet signed up. Obviously, it’s first and foremost for them to make a decision, but, by and large, they’re just a bit further back in the process. But there’s a hope, I think, not only here in New Zealand but through the other 10 countries within the PACER-Plus framework that they will come on board, because, ultimately, this is a free-trade agreement aimed at assisting the Pacific, and I’ll touch on that a little bit further on.

It is probably important for the House to note, and perhaps for those listening at home, that this is, obviously, a free-trade agreement. It is an agreement which requires domestic legislation in order to move through this House. So it is the prerogative of the executive—that is, Cabinet—to decide and sign off on treaties and agreements. This is indeed a treaty that was signed, actually, in Tonga in about the middle of last year, and, in saying that, I acknowledge Todd McClay, the then Minister of Trade, for his work in bringing, in effect, this agreement to where it is now. He had negotiated and worked with other parties and brought it to this House.

A treaty is signed by the executive—that has been done. It’s then referred to the Foreign Affairs, Defence and Trade Committee, and a good few months ago we went through, effectively, a discussion with the public around what they thought of the treaty. In many ways, it’s a feeding back, if you will, on what the treaty has done. The Foreign Affairs, Defence and Trade Committee has no powers, if you will, to change the treaty. Again, that’s negotiated by the Ministers of trade and others, including perhaps, sometimes, the Minister of Foreign Affairs.

But we listened to the public. We had a good number of submissions at that time, and why I mention that is, of course, as I mentioned earlier, this particular amendment bill only had the one submitter. But, prior to that, a good number of New Zealanders spoke, by and large in favour—which is probably no surprise—of the agreement and of this free-trade deal. They saw it as something incredibly positive. Really importantly—and my impression is that it will be interesting for other speakers, particularly those who sat on the committee—it was seen as being good for New Zealand, of course; one would never act against the national interest. But those who were speaking to the committee spoke about the positivity, as well, that it’s going to bring for the Pacific, and not in the sense of it being something imposed, but, actually, in their engagement, often, with existing traders into the Pacific, and we should understand that those countries want a free-trade deal like this. They want to be involved and they see the benefits of this agreement.

As you might appreciate, seeing that this sits within the executive to make its decisions, we, as a committee, heard what people thought about it. In fact, this is almost unheard of, but we returned to the House to have a full debate, or a discussion really. There wasn’t—well, there is a little bit of resistance to this bill, and, depending on how we go on time, we might mention the Greens. There’s a little bit of resistance from them, and, look, speaking as the chair of the select committee, that’s absolutely the prerogative of a political party or any individual MP to voice their opinion on these things. I think it’s actually particularly healthy that an individual MP or a party or a member of Parliament within that can actually speak their mind without consequence. So I think that’s positive.

We came to the House and we discussed the merits of the agreement. However, for the agreement, an international treaty, to come into effect, the New Zealand House of Representatives—this Parliament—needs to pass a bill, a piece of domestic legislation. So it’s only a couple of pages long. Again, I suppose I’m sharing this not so much for the benefit of members of the House, as I’m sure they’re up to speed on it, but it is in some ways, hopefully, educative for the public that this 2½ pages of documentation—this bill—is not the free-trade agreement itself. It’s simply the domestic legislation which enables this agreement, this free-trade deal, to come to pass.

Look, fundamentally, what it’s doing is facilitating free trade across the Pacific, and it’s doing it in a somewhat unique way. First and foremost, it is prioritising New Zealand’s aid into the Pacific—up to about 20 percent of our aid. That’s nothing new. New Zealand has always focused its work into the Pacific, and proudly so. I’ve had the pleasure, particularly living in Fiji, to see the benefit of that. While it’s easy to talk about Pacific resets and so forth, there wasn’t really much to reset. New Zealand has always contributed substantially into the Pacific. But through PACER-Plus the intention is to not only provide aid for the services that we might think of—roads and hospitals and the like—but also ensure that our Pacific partners can develop in their trading abilities. So whether that’s, obviously, helping them relook at their legislation and regulation around tariffs, customs, and excises; whether it’s actually helping businesses to develop their skills—that’s what PACER is aiming to do.

I do know that the Green minority view—and I’m sure they will speak to it themselves if they take a call—is they sort of feel that it’s not quite doing enough. Unfortunately, I have quoted Voltaire at the Greens quite a few times, but the message doesn’t seem to be getting through. But, you know, “The perfect is the enemy of the good.” This is a very good piece of legislation, bringing a free-trade agreement into reality. I think it’s something that the Pacific wants.

When we heard from the submitters, or the submitter in the singular, on this bill—it was from the New Zealand Federation of Business and Professional Women, who by and large were supportive but were obviously really keen, particularly on how agreements like this will affect women. In many ways the committee felt, by majority, that that was important to hear. It’s something, obviously, that foreign affairs need to engage with as it continues its work, but it’s not something that was needed in the bill. I suppose it’s a somewhat political if not philosophical argument of just how far free-trade agreements can go. The long and the short of that is that people like myself see that a free-trade agreement is just that. It’s about trade. It’s not a vehicle or a back door to bring in every other treaty to deal with climate change rights as they’re perceived by different groups. That’s not the primary purpose. But I think really fundamentally, and particularly speaking to the submitters from the federation, it is important that through other mechanisms, particularly in our unilateral, bilateral, and multilateral relationships into the Pacific, we make sure that on issues affecting various groups—in this case they were focusing on women—we can have those conversations.

So, look, I think it’s a very good free-trade agreement. It’s positive to see that after all these years, we’ve engaged other countries around the world and we’ve finally been able to reach an agreement with our countries, our friends here in the Pacific. I’m looking forward to this progressing again. My thanks to the Minister for his work, acknowledging the previous Minister, Todd McClay, for his work there too. I look forward to it completing its second reading.

Hon DAMIEN O’CONNOR (Associate Minister for Trade and Export Growth): Thank you very much, Mr Assistant Speaker. It’s an honour to follow my colleague the Hon David Parker, who, as Minister, has introduced this bill, and the previous speaker, Simon O’Connor, who sits on the Foreign Affairs, Defence and Trade Committee, to acknowledge a lot of the good work and the intent of this.

It’s very timely. We have just embarked upon a programme around the country of trade for all, talking to New Zealanders and explaining to them the benefits of trade. One might have thought that that was rather obvious, but, actually, for an increasing number of people who are not directly involved in trade—they live their busy lives in New Zealand—they don’t appreciate that we export the vast majority of that which we produce and we open the doors to goods from all around the world, and, in particular, from Pacific nations. They are our closest and dearest friends in many, many ways.

We’ve been the beneficiaries, I guess—and I hate to say it this way—of the trade in people, where good people from the Pacific Islands have come to New Zealand and have helped us build an economy. The least we can do is then take goods from those countries and help them build capability within their own island nations. Indeed, we’ve had an agreement in place: SPARTECA, the South Pacific Regional Trade and Economic Cooperation Agreement. It’s been in place, but this is an upgrade of that. I acknowledge the previous Minister, Todd McClay, who signed this off, and the Government in working through the process to arrive at an agreement. From my perspective, I guess, as Minister of State for Trade and Export Growth, I’m very happy to endorse that good work and ensure that we carry on with not only convincing New Zealanders but actually convincing the world of the value and benefits of trade for all, ensuring that benefits flow right through.

Some of the issues, in relation to trade, that are of concern are biosecurity, in particular, and we do have some risks in trade with Pacific nations. What this agreement does is not in any way diminish or undermine the biosecurity requirements that we have in place, and there are some issues that we’ve got to try and avoid around fruit fly from some of the Pacific nations. What we will do, of course, is assist them, and through the, I guess, increase in the overseas development aid that Minister Peters announced in the last Budget, we will have more money to assist the nations to build their capability to have in place the best customs and biosecurity systems, so that, in building their trade with our country, we don’t put ourselves at risk from, in some areas, simple lack of capacity. And that’s why, as a Government, we’re not just taking a one-dimensional approach to this; our approach to the Pacific nations is not just opening the door for trade but building capability and, of course, encouraging some collaboration.

There are 11 members who have signed this agreement—two major players outside the agreement. And we’d welcome, and I’m sure that all the members would welcome, both Fiji or Papua New Guinea coming into that at any stage. That would add further strength to what is truly a Pacific bloc and trade agreement. I say that we have a real interest in a stable and prosperous Pacific. There is a lot of interest in that area at the moment from nations who understand, I guess, the sea and marine life. The marine resources of those nations are quite significant collectively, and that’s why they are of interest to, traditionally, over the years, the French and then the wider European nations, the US, and now more recently China. But all the way through that, New Zealand has been, and we must be, a friendly neighbour and someone who can assist them to move themselves into what is a challenging world of not only climate change but disruption in world markets, and this agreement is a good step down the path to stronger relationships with our Pacific neighbours and building the capability, limited as it is in many places, to develop industries that will, I guess, allow them to export to the world.

There are technical issues that will be adjusted, like the rules of origin, that will enable them to, I guess, better source their products, to develop products that might be from a number of their nations, and that will then provide access into both Australia and New Zealand. And that’s off the back of, I guess, the SPARTECA, which did have that open entry into our two countries. This just provides some more flexibility in that area. I think the objective is, of course, to go beyond commodities and create higher value-added products, and I have to say that not only is it in importing products but actually we have to do the same with ours on the way out. So we’ll be sharing knowledge and how we build better value from everything that we do, and I think we have some experience, but so too there is some wisdom within the Pacific nations that we should take on board as we move forward.

I won’t talk for too much longer other than to say that, as a Government, we are very, very proud and happy to bring this piece of legislation into the House as a step to assist our Pacific neighbours and repay them, I guess, in some ways, for the wonderful contribution that they have brought to New Zealand by way of people, their culture, their manual labour sometimes, their intellect, and their creativity. That’s helped us, and now this piece of legislation is our turn to repay that debt and to assist in the development of a trade agreement that is an evolution, as I said, of SPARTECA and is one that we, I think, should be very, very proud of. I’m sure that the Minister of Foreign Affairs will be happy to assist them with their capability building through the additional money that has been provided by this Government in the Budget. This is trade for all, a benefit for all, and something that we as a nation are very proud to promote.

Debate interrupted.

The House adjourned at 10 p.m.